2009 which candidate will you buy cj v3.0 summer school in methods and techniques ljubljana 2009

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Which candidate will you ‘buy’?

Conjoint Analysis, from marketing studies to electoral research

Janko Hočevar & Toni Gril

Summer School in Methods and Techniques 2009

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3

Agenda

Part I.

• Intro to Conjoint Analysis

- Idea

- History

- Flavors

Part II.

• Conjoint Analysis in the context of political research

• Case studies:

- Slovenian parliamentary elections 2000

- Slovenian presidential elections 2002

• Q&A

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Part I.

Intro to Conjoint Analysis

Ask people what they want, and they say, “the best of everything”.

Ask them what they would like to spend, and they say, “a little as possible”.

– Bryan K. Orme

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Slide borrowed from: Batsell R., Chrzan K., Baggett S., SawtoothSoftware Conference, Barcelona 2008.

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7


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8

John


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9

Mary


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10

Bubba


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11

4,0

4,5

4,2

4,2

4,6

4,2

4,4

3,8

3,9

1 2 3 4 5

Fancy

Family-Oriented

Outdoorsy

Laid back

Calm

Exciting

Entertaining

Sexy

Romantic

• Bias toward high importance in ratings

• Lack of discrimination

• Different respondents use the scale differently

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12

• Ask Direct Questions about preference:

- What brand do you prefer?

- What Interest Rate would you like?

- What Annual Fee would you like?

- What Credit Limit would you like?

• Answers often trivial and unenlightening (e.g. respondents prefer low fees to

high fees, higher credit limits to low credit limits)

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13

CA Idea

• People cannot reliably express how they weight separate features of the

product/service

• But can evaluate the overall desirability of a complex product/service profile – a

more realistic approach

- Based on a function of the value of its separate (yet conjoined) parts

• We can break product/services into features (attributes & their levels)

• Based on how people evaluate the combined features (profiles) we can deduce

the preference scores people might have assigned to individual features of the

product/service

- That are the result of those overall evaluations

• A back-door, decompositional approach for estimating people‟s preferences,

rather than an explicit approach of simply asking people to rate, rank, .. separate

features

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CA Short History

• Based on the work by:

- Luce & Tukey in 60‟s Luce, D. & J. Tukey ,1964. Simultaneous conjoint measurement: A new type of fundamental measurement. Journal of

Mathematical Psycchology

- McFadden in 70‟s - Discrete choice methods McFadden, D. 1974. Conditional logit analysis of qualitative choice behavior. In P. Zarembka (ed.), Frontiers in

Econometrics, pp. 105-142. New York: Academic Press.

• Early 70s

- work of P. Green: Green, P. & V. Rao 1971, August. Conjoint measurement for quantifying judgemental data. Journal of Marketing

Research

- work of R. Johnson: • Johnson, R. 1974, May. Trade-off analysis of consumer values. Journal of Marketing Research

• 80‟s

- Green & Wind: application of conjoint analysis to help Marriott design its new Couryard Hotel • S. Herman & Bretton-Clark software released software system

- R. Johnson (at Sawtooth Software) released a software system Adaptive Conjoint Analysis (ACA)

• 90‟s

- Discrete Choice overtakes Traditional Conjoint methods • Commercial software released (SawtoothSoftware CBC)

• Application of of hierarchical Bayes (HB) methods to estimate individual-level models from discrete choice data (led by G. Allenby of the Ohio State University)

• 00‟s and beyond

- Maximum-Difference Scaling

- Adaptive Choice Based Conjoint (ACBC) software released by SawtoothSoftware in 2009

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Two broad types of CA

• “Traditional” CA

- uses data collected from sequential ratings, rankings or graded (rated) paired

comparisons followed by an analysis using simple linear models

- Use of “choice simulators” to predict individuals‟ preferences and choices

• No Choices are observed

• Choice-based Conjoint Analysis (CBC).

- uses data collected from a series of choices (from “choice sets”), followed by an

analysis using probabilistic choice models.

- Use of choice simulators to predict individuals‟ preferences and choices

• Choices are observed

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CA Terminology

• Attribute

- A feature of product/service: Brand, Price, Pack type,...

• Attribute Level

- A value or range of variation for an attribute:

• Coca Cola, Pepsi,..., 0.5€, 0.6€,..., 0,33 l Can, 0,5 l Plastic Bottle

• Profile / Concept

- A combination of attribute levels: Coca-Cola at 0.5€ in a 0,33 l Can

• Design

- the attribute combinations that make up product/service profiles/concepts and how

those profiles/concepts are combined within tasks.

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Design

• Orthogonality:

- each level appears an equal number of times with every other level of different

attributes. (zero correlation between pairs of attributes)

• Level Balance:

- within each attribute, each level appears an equal number of times.

• Minimal Overlap:

- achieve maximum variation across levels of an attribute within a (choice) task

(try not to repeat a level).

• Designs which are orthogonal and balanced are optimally efficient.

• In the real world: well-balanced, "nearly orthogonal“ designs

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CA Research Process

• Identify attributes that underlie consumer preferences for products/services.

• Select levels or values of each attribute to represent ranges of variation in real

markets

• Create product or service profiles generated from some type of experimental

design

• Administer to a sample of respondents

• Analyze the data

- Relative importance

- Utilities or Part-Worth's

- Simulations

- Optimizations

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CA Data Analysis

• Parameter estimates

- OLS

- MNL (HB)

• Simulations

- First choice rule

- Purchase Likelihood

- Share of Preference

- Randomized First Choice

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Basic Flavors

• CVA – Conjoint Value Analysis (traditional)

- One or two full profile concepts

- One design / experiment

- Rating

- OLS

- Individual parameter estimation

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Basic Flavors

• ACA – Adaptive Conjoint Analysis

- Two partial profile concepts

- Concepts complexity manipulation

- Unique individual design / experiment

- Starting point from direct (self-explicated) input

- Rating

- OLS

- Individual parameter estimation

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Starting point

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23

Starting point

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Paired comparison section

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Calibration part

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• CBC – Choice Based Conjoint

- Two or more concepts

- Full or partial profile

- Multiple designs / experiments

- Alternative specific designs

- Fixed / Constant alternatives

• (e.i. I wouldn‟t buy anything; I‟d stay with my current service; NONE)

- Choices, allocations (Constant Sum allocation)

- Group / Semi-individual parameter estimation (MNL HB)

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A Choice Task

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Alternative specific

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Partial profile

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What can we do with Conjoint data?

• Base case predictions linked with descriptive data

- who chooses what?

• Great input for segmentation (cluster analysis, latent class,...)

• Simulations (what if?)

- Sensitivity analysis (what if? systematically)

• Optimizations (best configurations)

• A simulator mimics a certain situation, that may or may not happen in reality (like

a flight simulator).

• The purpose is to estimate the probable effects of products/services.

• For this, the simulator needs input

- Data to describe the situation (scenario definition)

- Data on how consumers react (utilities from conjoint)

- Definition of the calculation

• Changing (part of) this data will result in new scenarios and new output

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Part II.

Conjoint Analysis in the context of political research

Case studies:

Slovenian parliamentary elections 2000

Slovenian presidential elections 2002

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The premise

• The outcome of presidential or party contest is influenced by many factors

- party identification, candidate personality, campaign strategy and tactics, financing,

etc.

• In a real „purchase situation‟, „consumers‟ do not make choices based on a

single attribute. Consumers examine a range of features or attributes and then

make judgments or trade-offs to determine their final purchase choice.

• This is just as true for the „choice‟ made in political situations, such as assessing

the viability of a candidate, determining the support of various political,

economic, social issues.

Product:

• Candidate (not „branded‟) / Political Party (not „branded‟ but with issues

positions)

• Political Parties / Candidates are:

- Managed as Products/Services

- Advertised as Poroduct/Services

- Communicated as Products/Services

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Client: The Mladina Magazine

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• Determine issues relative importance to voters, the most and least popular

position on each issue, the impact of a given position on voting behavior, and

the relative strength of different candidate profiles.

• To do that, we asked each respondent to rate a series of hypothetical pair of

candidates who have either a „liberal‟, „centrist‟, or „conservative‟ position on

each of 5 issue categories.

• Issues were the subject of debate in the campaign, and the position descriptions

were determined from positions that the candidates have actually taken and

were exposed in the media.

• C.A.T.I., n = 601

• ACA

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5 attributes & a total of 14 levels:

• History:

- Past injustices are settled, what is important

is the future

- There is no future unless we settle past

injustices

- The future must be a priority, but we must

never forget the past injustices

• Roman-Catholic church

- RCC should be included in the political

decision making

- RCC should be consulted only with the

essential political issues

- RCC must be excluded from political sphere

• Equalitarianism

- The state should determine maximum wage

of all managers in all companies

- The state should determine maximum wage

only of managers in state owned companies

- The state should not interfere with managers

wages

• Welfare

- Every single individual should take care of

his/hers social welfare (health care, pension

welfare,...)

- The state and every single individual should

take care of social welfare

- The state should take care of the whole

social welfare of its citizens

• Lustration

- Those who were appointed to management

positions by the former political system,

should stay there if they are capable and

qualified

- We should remove all those who were

appointed to management positions by the

former political system

• 10 pair

• 2 attributes in pair

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Roman-Catholic

church

21,6%

Equalitarianism

19,7%

History

20,3%

Lustration

15,5% Welfare

22,9%

Relative importance of issues

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2,6

-20,4

17,8

-22,7

8,314,4

-0,3

9,5

-9,2

-39,9

19,7 20,1 20,9

-20,9

-50,0

-40,0

-30,0

-20,0

-10,0

0,0

10,0

20,0

30,0

Past in

justic

es a

re s

ettle

d, fu

ture

is

import

ant

There

is n

o futu

re

The futu

re m

ust be a

priority

RC

C s

hould

be in

clu

ded

RC

C s

hould

be c

onsulte

d

RC

C m

ust be e

xclu

ded

The s

tate

should

dete

rmin

e

maxim

um

wage

The s

tate

should

dete

rmin

e

maxim

um

wage o

nly

sta

te o

wned

com

panie

s

The s

tate

should

not in

terf

ere

Every

sin

gle

indiv

idual s

hould

take

care

The s

tate

and e

very

sin

gle

indiv

idual

should

take c

are

The s

tate

should

take c

are

of th

e

whole

socia

l welfa

re

Sta

y if

they a

re c

apable

and q

ualif

ied

We s

hould

rem

ove a

ll

History Roman-Catholic church Equalitarianism Welfare Lustration

Utilities / Part Worth's

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38


• Max – Min horse race

- Max purchase likelihood = 62,43%

- Min purchase likelihood = 20,47%

- Max : Min | 80,6% : 19,4%

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-3,63

-8,62

0

-8,44

-1,87

0

-1,82

0

-4,15

-13,5

-0,11 0 0

-10,16

-16

-14

-12

-10

-8

-6

-4

-2

0

Pa

st

inju

stice

s

are

se

ttle

d,

Th

ere

is n

o

futu

re

Th

e fu

ture

mu

st b

e a

pri

ori

ty

RC

C

sh

ou

ld b

e

inclu

de

dR

CC

sh

ou

ld b

e

co

nsu

lte

dR

CC

mu

st

be

exclu

de

d

Th

e s

tate

sh

ou

ld

de

term

ine

Th

e s

tate

sh

ou

ld

de

term

ine

Th

e s

tate

sh

ou

ld n

ot

inte

rfe

re

Eve

ry

sin

gle

ind

ivid

ua

lT

he

sta

te

an

d e

ve

ry

sin

gle

Th

e s

tate

sh

ou

ld ta

ke

ca

re o

f th

e

Sta

y if th

ey

are

ca

pa

ble

We

sh

ou

ld

rem

ove

all


2,58

0

5,4

0

4,555,36

1,952,66

0 0

9,89 10,31

6,8

00

2

4

6

8

10

12

Past

inju

stic

es

are

settle

d,

There

is n

o

futu

re

The futu

re

must be a

priority

RC

C

should

be

inclu

ded

RC

C

should

be

consulte

d

RC

C m

ust

be

exclu

ded

The s

tate

should

dete

rmin

e

The s

tate

should

dete

rmin

e

The s

tate

should

not

inte

rfere

Every

sin

gle

indiv

idual

The s

tate

and e

very

sin

gle

The s

tate

should

take

care

of th

e

Sta

y if

they

are

capable

and

We s

hould

rem

ove a

ll


Max = 62,43%, ABS % gain / loss

Min = 20,47%, ABS % gain / loss

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• Issues positions to avoid / to put out

- Where? (geography, not really applicable in Slovenia), to whom? (gender, age,...) ...

• Voter‟s profile

• (Respondent) Party identification profile

• Handling “don‟t knows” or “refused to answer” modalities

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Client: FDV

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• Determine issues relative importance to voters, the most and least popular

position on each issue, the impact of a given position on voting behavior, and

the relative strength of different candidate profiles.

- To do that, we asked each respondent to rate a series of hypothetical pair of

candidates who have either a „liberal‟, „centrist‟, or „conservative‟ position on each of

four issue categories.

- Issues were the subject of debate in the campaign, and the position descriptions

were determined from positions that the candidates have actually taken and were

exposed in the media.

• Determine relative importance of demographic characteristics of a presidential

candidate and the impact on voting behavior.

- To do that, we asked each respondent to rate a series of hypothetical pair of

candidates described with demographic characteristics.

• C.A.T.I., issues n = 750, demo n = 786

• ACA

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Political issues:

3 attributes & a total of 7 levels:

• History:

- Past injustices are settled, what is important

is the future

- There is no future unless we settle past

injustices

• Roman-Catholic church

- RCC should take active part in the political

decision making

- RCC should be consulted only with the

essential political issues

- RCC must be excluded from political sphere

• Foreign policy

- Joining NATO, EU and to open way for

foreign investments takes careful

consideration of every step we make

- There should be no hesitation with joining

NATO, EU and to open way for foreign

investments

• 10 pair

• 2 / 3 attributes in pair

Demographic profile:

3 attributes & a total of 8 levels

• Gender - Male

- Female

• Age - 40 yrs or younger

- Between 40 and 60 yrs old

- Older than 60 yrs

• Background - In Politics

- In Economy

- In other profession (health, science, culture, education, sport,...)

• 12 pair

• 2 / 3 attributes in pair

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Relative importance of issues Relative importance of demo

Roman-Catholic

church

46,0%

History

29,5%

Foreign policy

24,5%

Age

45,2%

Gender

17,1%Background

37,7%

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45


Issue Utilities / Part Worth's Demo Utilities / Part Worth's

26,1

-26,1-33,3

-24,8

58,2

25,9

-25,9

-40,0

-20,0

0,0

20,0

40,0

60,0

80,0

Past

inju

stices a

re s

ett

led,

futu

re is

import

ant

There

is n

o f

utu

re

RC

C s

hould

take a

ctive p

art

RC

C s

hould

be c

onsulted

RC

C m

ust

be e

xclu

ded

NA

TO

, E

U,

...

Care

ful consid

era

tion o

f

every

ste

p

NA

TO

, E

U,.

.. N

o h

esitation

History Roman-Catholic church Foreign policy

7,1

-7,1-10,2

51,5

-41,3

-0,3

19,7

-19,4

-60,0

-40,0

-20,0

0,0

20,0

40,0

60,0

Male

Fem

ale

40 y

rs o

r younger

Betw

een 4

0 a

nd 6

0 y

rs o

ld

Old

er

than 6

0 y

rs

In P

olit

ics

In E

conom

y

In o

ther

pro

fessio

n

Gender Age Background

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46


Male – Female horse race (same profile; 40-60 yrs old, background in economy)

- Randomized First Choice rule:

• Male : Female | 52,9% : 47,1%

Winner Max purchase likelihood = 62,67%, ABS % gain / loss

0,0

-3,0

-11,2

0,0

-16,5

-4,1

0,0

-7,1

-18,0

-16,0

-14,0

-12,0

-10,0

-8,0

-6,0

-4,0

-2,0

0,0

Male Female 40 yrs or

younger

Between 40

and 60 yrs

old

Older than

60 yrs

In Politics In Economy In other

profession

Gender Age Background

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47


Official result (2nd round)

• J. Drnovšek = 56,54 %

• B. Brezigar = 43,46 %

Simulation:

• J. Drnovšek

(Male, 40-60 yrs old, background in politics):

56,20%

• B. Brezigar

(Female, 40-60 yrs old, background in other profession /public prosecutor/):

43,80%

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“Life is one big conjoint analysis . . . one tradeoff

after another.”

– Paul E. Green

2009 which candidate will you buy cj v3.0 summer school in methods and techniques ljubljana 2009

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