Consumer valuation of energy-saving features of residential air conditioners with hedonic and choice models

The promotion of energy-efficient appliances is necessary to reduce the energetic and environmental burden of the household sector. However, many studies have reported that a typical consumer underestimates the benefits of energy-saving investment on the purchase of household electric appliances. To analyze this energy-efficiency gap problem, many scholars have estimated implicit discount rates that consumers use for energy-consuming durables. Although both hedonic and choice models have been used in previous studies, a comparison between two models has not yet been done. This study uses point of sale data about Japanese residential air conditioners and estimates implicit discounts rates with both hedonic and choice models. Both models demonstrate that a typical consumer underinvests in energy efficiency. Although choice models estimate a lower implicit discount rate than hedonic models, the latter models estimate the values of other product characteristics more consistently than choice models.

Consumer willingness to pay for in-flight service and comfort levels: A choice experiment

In the competitive aviation market as a result of the emergence of low cost carriers, charter airlines have had to reconsider their approach to service provision. Specifically, the reduction in service and comfort levels offered by the low cost airlines provides charter carriers with an opportunity to differentiate their product based on the quality of the offering. To consider this strategic option we employ an on-line choice experiment to examine consumer choices with respect to the bundle of services on offer when deciding to purchase a flight, With these data we use the Bayesian methods to estimate a mixed logit specification. Our results reveal that in principle passengers are willing to pay a relatively large amount for enhanced service quality. (C) 2008 Elsevier Ltd. All rights reserved.

Eliciting consumer preferences for certified animal-friendly foods: can elements of the theory of planned behavior improve choice experiment analysis?

Models used in neoclassical economics assume human behaviour to be purely rational. On the other hand, models adopted in social and behavioural psychology are founded on the ‘black box’ of human cognition. In view of these observations, this paper aims at bridging this gap by introducing psychological constructs in the well established microeconomic framework of choice behaviour based on random utility theory. In particular, it combines constructs developed employing Ajzen’s theory of planned behaviour with Lancaster’s theory of consumer demand for product characteristics to explain stated preferences over certified animal-friendly foods. To reach this objective a web survey was administered in the largest five EU-25 countries: France, Germany, Italy, Spain and the UK. Findings identify some salient cross-cultural differences between northern and southern Europe and suggest that psychological constructs developed using the Ajzen model are useful in explaining heterogeneity of preferences. Implications for policy makers and marketers involved with certified animal-friendly foods are discussed.

GM food purchase intentions: linking the theory of planned behaviour with consumer trust and stated choice

After the “European” experience of BSE and further food safety crises consumer trust is playing an increasingly important role in political and marketing decision making. This also relates to the area of consumer acceptance of GM food. This paper integrates consumer trust with the theory of planned behavior and a stated choice model to gain a more complete picture of consumer decision making. Preliminary results indicate that when GM products offer practical benefits to consumers acceptance may increase considerably. Furthermore, both trust and perceived benefits contribute significantly to explaining the level of acceptance.

Menu labeling and food choice: A systematic review of the literature concerning the effects of menu labeling on consumer food choices

Objective: To review published literature on the impact of restaurant menu labeling on consumer food choices.^ Method: To examine all relevant studies published on the topic from 2002 to 2012.^ Results: Sixteen studies were identified as relevant and suitable for review. These studies comprised of one systematic review, one health impact assessment, and fourteen research studies conducted at restaurants, cafeterias, and laboratories. Three of ten studies conducted at restaurants and cafeterias and two of four studies conducted at laboratories found positive effects of menu labeling on consumer food choices. Conversely, the systematic review identified for this review found that five out of six studies resulted in weakly positive effects. The health impact assessment estimated positive effects; however, the results of this assessment must be cautiously interpreted since the authors used simulated data.^ Conclusion: Overall, there is insufficient evidence to provide support for the majority of the types of menu labels identified in this review on consumer food choice.^

Consumer behavior towards fuel efficient vehicles. Volume IV: operating instructions and programs documentation for the CS Vehicle Choice Simulation Model. Final report.

National Highway Traffic Safety Administration, Technology Assessment Division, Washington, D.C.

Inequalities in retail choice: exploring consumer experiences in suburban neighbourhoods

Focuses on deprived neighbourhoods where instances of “food deserts” have been found and explores, through focus groups, consumer experiences of food store choices. Focusing on suburban neighbourhoods in Portsmouth, identifies significant differences in experiences of choice both between and within neighbourhoods. In some localities, the research also finds dissatisfaction with the (supposedly-coveted) “small local store”. Shows that choice is very different from provision, and conceptualises how consumers’ circumstances, situation and individual characteristics can significantly reduce a broad theoretical provision of food stores to a limited set of perceived real choices.

Influence of discount price announcements on consumer's behavior

The theoretical framework that underpins this research study is based on the Prospect Theory formulated by Kahneman and Tversky, and Thaler's Mental Accounting Theory. The research aims to evaluate the consumers' behavior when different patterns of discount are offered (in percentage and absolute value and for larger and smaller discounts). Two experiments were conducted to explore these patterns of behavior and the results that were obtained supported the view that the framing effect was a common occurrence. The patterns of choice of individuals in a sample were found to be different due to changes in the ways discounts were offered. This can be explained by the various ways of presenting discount rates that had an impact on the influence of purchase intentions, recommendations and quality perception.

2,4,6- Ttrichloroanisol:a consumer panel evaluation

“Cork taint” is a major problem in wine industry and is caused by contamination of wines. This contamination is usually attributed to wine cork stoppers and 2,4,6-trichloroanisole (2,4,6-TCA) is one of the compounds mostly associated to this off-flavour. In this work, a consumer panel performed “forced choice” triangular tests in order to measure Odour Detection Thresholds (ODT) and Taste Detection Thresholds (TDT) of 2,4,6-TCA in water, hydro-alcoholic solutions (11.5% and 18% ethanol) and white and red wines. A paired preference test was also performed by the panel in order to measure Odour Rejection Threshold (ORT) in white and red wine spiked with 2,4,6-TCA. Results obtained show that the ODT and the TDT for 2,4,6-TCA in water were 0.2 and 0.3 ng/L, respectively. In hydro-alcoholic solutions with 11.5% and 18% ethanol the ODT were 4 and 10 ng/L respectively. In red wine the ODT and the TDT were 0.9 and 1.7 ng/L and in white wine were 1.5 and 1.0 ng/L respectively. ORT for white was 10.4 ng/L and for red wines 16.0 ng/L. These results suggest that although this group of consumers detected very low concentrations of 2,4,6-TCA in wines, they did not reject the wine at these low concentration values.

Paradox of choice: The influence of assortment size on customer satisfaction

Recently researchers showed that more choice is not always better. Choosing from large assortments can be overwhelming, raising expectations and decreasing overall level of consumer satisfaction. Author contributes to existing overchoice studies by using real assortment of online stores to find influence of assortment size on customer satisfaction. 90 students participated in the main experiment, where they chose a smartphone case for their friend. Results of the study show that large assortment size leads to higher expectations, higher choice difficulty and higher level of satisfaction. This research does not show overchoice presence and author suggests future studies could focus more on assortment variety and more personal characteristics of consumers, like preference uncertainty.

Information overload, choice deferral, and moderating role of need for cognition: Empirical evidence

ABSTRACT Choice deferral due to information overload is an undesirable result of competitive environments. The neoclassical maximization models predict that choice avoidance will not increase as more information is offered to consumers. The theories developed in the consumer behavior field predict that some properties of the environment may lead to behavioral effects and an increase in choice avoidance due to information overload. Based on stimuli generated experimentally and tested among 1,000 consumers, this empirical research provides evidence for the presence of behavioral effects due to information overload and reveals the different effects of increasing the number of options or the number of attributes. This study also finds that the need for cognition moderates these behavioral effects, and it proposes psychological processes that may trigger the effects observed.

Managing Quality under Heterogeneous Consumer Demand and Product Quality, October 2005

Based on accepted advances in the marketing, economics, consumer behavior, and satisfaction literatures, we develop a micro-foundations model of a firm that needs to manage the quality of a product that is inherently heterogeneous in the presence of varying customer tastes or expectations for quality. Our model blends elements of the returns to quality, customer lifetime value, and service profit chain approaches to marketing. The model is then used to explain several empirical results pertaining to the marketing literature by explicitly articulating the trade-offs between customer satisfaction and costs (including opportunity costs) of quality. In this environment firms will find it optimal to allow some customers to go unsatisfied. We show that the relationship between the expected number of repeated purchases by an individual customer is endogenous to the choice of quality by the firm, indicating that the number of purchases cannot be chosen freely to estimate a customer’s lifetime value.

On Consumer Decision Strategies: New Approaches for Studying and Aiding Preferential Choices

This dissertation focuses on the strategies consumers use when making purchase decisions. It is organized in two main parts, one centering on descriptive and the other on applied decision making research. In the first part, a new process tracing tool called InterActive Process Tracing (IAPT) is pre- sented, which I developed to investigate the nature of consumers' decision strategies. This tool is a combination of several process tracing techniques, namely Active Information Search, Mouselab, and retrospective verbal protocol. To validate IAPT, two experiments on mobile phone purchase de- cisions were conducted where participants first repeatedly chose a mobile phone and then were asked to formalize their decision strategy so that it could be used to make choices for them. The choices made by the identified strategies correctly predicted the observed choices in 73% (Experiment 1) and 67% (Experiment 2) of the cases. Moreover, in Experiment 2, Mouselab and eye tracking were directly compared with respect to their impact on information search and strategy description. Only minor differences were found between these two methods. I conclude that IAPT is a useful research tool to identify choice strategies, and that using eye tracking technology did not increase its validity beyond that gained with Mouselab. In the second part, a prototype of a decision aid is introduced that was developed building in particular on the knowledge about consumers' decision strategies gained in Part I. This decision aid, which is called the InterActive Choice Aid (IACA), systematically assists consumers in their purchase decisions. To evaluate the prototype regarding its perceived utility, an experiment was conducted where IACA was compared to two other prototypes that were based on real-world consumer decision aids. All three prototypes differed in the number and type of tools they provided to facilitate the process of choosing, ranging from low (Amazon) to medium (Sunrise/dpreview) to high functionality (IACA). Overall, participants slightly preferred the prototype of medium functionality and this prototype was also rated best on the dimensions of understandability and ease of use. IACA was rated best regarding the two dimensions of ease of elimination and ease of comparison of alternatives. Moreover, participants choices were more in line with the normatively oriented weighted additive strategy when they used IACA than when they used the medium functionality prototype. The low functionality prototype was the least preferred overall. It is concluded that consumers can and will benefit from highly functional decision aids like IACA, but only when these systems are easy to understand and to use.