ASSESSING QUALITY IN HIGH-UNCERTAINTY MARKETS: ONLINE REVIEWS OF CREDENCE SERVICES

In economics of information theory, credence products are those whose quality is difficult or impossible for consumers to assess, even after they have consumed the product (Darby & Karni, 1973). This dissertation is focused on the content, consumer perception, and power of online reviews for credence services. Economics of information theory has long assumed, without empirical confirmation, that consumers will discount the credibility of claims about credence quality attributes. The same theories predict that because credence services are by definition obscure to the consumer, reviews of credence services are incapable of signaling quality. Our research aims to question these assumptions. In the first essay we examine how the content and structure of online reviews of credence services systematically differ from the content and structure of reviews of experience services and how consumers judge these differences. We have found that online reviews of credence services have either less important or less credible content than reviews of experience services and that consumers do discount the credibility of credence claims. However, while consumers rationally discount the credibility of simple credence claims in a review, more complex argument structure and the inclusion of evidence attenuate this effect. In the second essay we ask, “Can online reviews predict the worst doctors?” We examine the power of online reviews to detect low quality, as measured by state medical board sanctions. We find that online reviews are somewhat predictive of a doctor’s suitability to practice medicine; however, not all the data are useful. Numerical or star ratings provide the strongest quality signal; user-submitted text provides some signal but is subsumed almost completely by ratings. Of the ratings variables in our dataset, we find that punctuality, rather than knowledge, is the strongest predictor of medical board sanctions. These results challenge the definition of credence products, which is a long-standing construct in economics of information theory. Our results also have implications for online review users, review platforms, and for the use of predictive modeling in the context of information systems research.

THE DEVELOPMENT EFFECTIVENESS OF INTERNATIONAL WATER AND SANITATION INFRASTRUCTURE PROJECTS: DEFINING “QUALITY AT ENTRY” OF WORLD BANK PROJECTS.

Over the past 15 years, the number of international development projects aimed at combating global poverty has increased significantly. Within the water and sanitation sector however, and despite heightened global attention and an increase in the number of infrastructure projects, over 800 million people remain without access to appropriate water and sanitation facilities. The majority of donor aid in the water supply and sanitation sector of developing countries is delivered through standalone projects. The quality of projects at the design and preparation stage is a critical determinant in meeting project objectives. The quality of projects at early stage of design, widely referred to as quality at entry (QAE), however remains unquantified and largely subjective. This research argues that water and sanitation infrastructure projects in the developing world tend to be designed in the absence of a specific set of actions that ensure high QAE, and consequently have relatively high rates of failure. This research analyzes 32 cases of water and sanitation infrastructure projects implemented with partial or full World Bank financing globally from 2000 – 2010. The research uses categorical data analysis, regression analysis and descriptive analysis to examine perceived linkages between project QAE and project development outcomes and determines which upstream project design factors are likely to impact the QAE of international development projects in water supply and sanitation. The research proposes a number of specific design stage actions that can be incorporated into the formal review process of water and sanitation projects financed by the World Bank or other international development partners.