Examining the "No-Choice" Option in Choice-Based Conjoint Analysis
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Date
2018-05
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The Ohio State University
Abstract
Choice-Based Conjoint analysis (CBC) is a method used to determine how individual consumers value attributes of a product or service. The consumer selects the option he or she would be most likely to purchase among those presented, which includes a "no-choice" option. The "no-choice" option is an alternative within a CBC analysis that allows consumers to decide against purchasing any of the presented options. This no-choice option is necessary in order to correctly simulate real choices, but could be problematic if each consumer perceives this option differently (Allenby, et. al. 1995). The goal of this research is to provide a recommendation for how to improve the consistency of choices in CBC analysis. We employ the framework in General Evaluability Theory (Hsee & Zhang 2010) to justify potential improvements to CBC. We hypothesize that evaluability of the no-choice option can be improved by creating a consistent view of the frontier of products available to the consumer. We will test this hypothesis by sampling 1000 respondents randomly split into three different groups, with each group receiving a different amount of information about the products in the market. A control group will engage in standard CBC, the first treatment group will be shown the prices of products in the market, and a second treatment group will be shown the price of products in relation to multiple attributes of the product. The results show no significant differences in the propensity to select the no-choice option between the three experimental groups. Fitting a Hierarchical Multinomial Logit Model to the data, three attributes show significant differences in the upper level between the control group and treatment group one. This suggests that participants in the treatment group value products with those attributes more highly compared to participants in the control group. Further investigation looked at qualified versus non-qualified survey participants and showed that additional information about the market gave non-qualified participants a lower propensity to select the no-choice option. We conclude that using proper screening techniques allows standard Choice-Based Conjoint Analysis to be a robust tool for marketing researchers given the results from qualified survey respondents.
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Keywords
conjoint analysis, marketing, consumer behavior, survey research