The authors update and extend their 1978 review of conjoint analysis. In addition to discussing several new developments, they consider alternative approaches for measuring preference structures in...

https://www.jstor.org/stable/info/1251756

Conjoint Analysis in Marketing: New Developments with Implications for Research and Practice:

aspects of well-being. We report an analysis ofmore than 450,000 responsesto the Gallup-HealthwaysWell-BeingIndex, adailysurveyof 1,000 US residents conducted by the Gallup Organization. We find that emotional well-being (measured by questions about emotional experiencesyesterday)andlifeevaluation(measuredbyCantril’sSelfAnchoringScale) have different correlates. Income andeducation are more closely related to life evaluation, but health, care giving, loneliness,andsmokingarerelativelystrongerpredictorsofdailyemotions. When plotted against log income, life evaluation rises steadily. Emotional well-being also rises with log income, but there is no further progress beyond an annual income of ∼$75,000. Low income exacerbates the emotional pain associated with such misfortunes as divorce, ill health, and being alone. We conclude that high income buys life satisfaction but not happiness, and that low income is associated both with low life evaluation and low emotional well-being.

/pdf/high-income-improves-evaluation-of-life-but-not-emotional-1n7dwx0ayf.pdf

High income improves evaluation of life but not emotional well-being

Policy decisions at the organizational, corporate, and governmental levels should be more heavily influenced by issues related to well-being—people’s evaluations and feelings about their lives. Domestic policy currently focuses heavily on economic outcomes, although economic indicators omit, and even mislead about, much of what society values. We show that economic indicators have many shortcomings, and that measures of well-being point to important conclusions that are not apparent from economic indicators alone. For example, although economic output has risen steeply over the past decades, there has been no rise in life satisfaction during this period, and there has been a substantial increase in depression and distrust. We argue that economic indicators were extremely important in the early stages of economic development, when the fulfillment of basic needs was the main issue. As societies grow wealthy, however, differences in well-being are less frequently due to income, and are more frequently due to factors such as social relationships and enjoyment at work.

https://journals.sagepub.com/doi/pdf/10.1111/j.0963-7214.2004.00501001.x

Beyond Money Toward an Economy of Well-Being

The authors present a unified strategic framework that enables competing marketing strategy options to be traded off on the basis of projected financial return, which is operationalized as the change in a firm’s customer equity relative to the incremental expenditure necessary to produce the change. The change in the firm’s customer equity is the change in its current and future customers’ lifetime values, summed across all customers in the industry. Each customer’s lifetime value results from the frequency of category purchases, average quantity of purchase, and brand-switching patterns combined with the firm’s contribution margin. The brand-switching matrix can be estimated from either longitudinal panel data or cross-sectional survey data, using a logit choice model. Firms can analyze drivers that have the greatest impact, compare the drivers’ performance with that of competitors’ drivers, and project return on investment from improvements in the drivers. To demonstrate how the approach can be implemented in a specific corporate setting and to show the methods used to test and validate the model, the authors illustrate a detailed application of the approach by using data from the airline industry. Their framework enables what-if evaluation of marketing return on investment, which can include such criteria as return on quality, return on advertising, return on loyalty programs, and even return on corporate citizenship, given a particular shift in customer perceptions. This enables the firm to focus marketing efforts on strategic initiatives that generate the greatest return.

http://accuraad.nl/wp-content/uploads/2012/09/Return-on-marketing1.pdf

Return on Marketing: Using Customer Equity to Focus Marketing Strategy

Statistical modeling is a powerful tool for developing and testing theories by way of causal explanation, prediction, and description. In many disciplines there is near-exclusive use of statistical modeling for causal ex- planation and the assumption that models with high explanatory power are inherently of high predictive power. Conflation between explanation and pre- diction is common, yet the distinction must be understood for progressing scientific knowledge. While this distinction has been recognized in the phi- losophy of science, the statistical literature lacks a thorough discussion of the many differences that arise in the process of modeling for an explanatory ver- sus a predictive goal. The purpose of this article is to clarify the distinction between explanatory and predictive modeling, to discuss its sources, and to reveal the practical implications of the distinction to each step in the model- ing process.

/pdf/to-explain-or-to-predict-1wxih4kis9.pdf

To Explain or to Predict

A number of governments and public policy institutes have developed ldquoQuality of Life Indexesrdquo – statistics that attempt to measure the quality of life for entire states or regions. We develop 14 criteria for determining the validity and usefulness of such QOL indexes to public policy. We then review 22 of the most-used QOL indexes from around the world. We conclude that many of the indexes are successful in that they are reliable, have established time series measures, and can be disaggregated to study subpopulations. However, many fall short in four areas: (1) indexes vary greatly in their coverage and definitions of domains of QOL, (2) none of the indexes distinguish among the concepts of input, throughput, and output that are used by public policy analysts, (3) they fail to show how QOL outputs are sensitive to public policy inputs, and (4) none have examined convergent validity against each other. We conclude that many of these indexes are potentially very useful for public policy and recommend research to further improve them.

Quality of life indexes for national policy: Review and agenda for research

``Will raising the incomes of all increase the happiness of all?'' Intuitionsays `yes' but theories of relative utility caution that the answer may be`no'. The theory of relative utility holds that people's happiness dependson income relative to others (social comparisons), or on income relative totheir own past income (adaptive expectations) – so that raising the incomes ofall may not increase average long-term happiness. In contrast, the theoryof absolute utility predicts that additional income allows each person to filladditional needs, thus increasing average long-term happiness.Previous tests among these theories have been plagued by low statisticalpower, which has been incorrectly interpreted as evidence against absoluteutility models. The current study improves statistical power by includinglonger time series, by adding nine nations with low GDP/capita and (in someanalyses) by pooling countries into income tiers. We also apply a dynamicmodel by Van Praag and Kapteyn (1973), which can estimate separate effectsfor social comparisons, adaptive expectations, and absolute utility theories.The results show no effect for social comparison across countries, but showsupport for partial adaptation to new income over a two-year period.Most importantly, increasing national income does go with increasingnational happiness, but the short-term effect on happiness is larger thanthe long-term effect for a given rise in income.

Wealth and Happiness Revisited--Growing National Income Does Go with Greater Happiness.

The ‘Easterlin paradox’ holds that economic growth does not add to the quality-of-life and that this appears in the fact that average happiness in nations has not risen in the last few decades. The latest trend data show otherwise. Average happiness has increased slightly in rich nations and considerably in the few poor nations for which data are available. Since longevity has also increased, the average number of happy life years has increased at an unprecedented rate since the 1950s.

/pdf/rising-happiness-in-nations-1946-2004-a-reply-to-easterlin-8p1jyb4gbw.pdf

Rising Happiness in Nations 1946–2004: A Reply to Easterlin

http://web.nchu.edu.tw/pweb/users/hsiaolu/lesson/9913.pdf

Return Policies and the Optimal Level of "Hassle"

The authors consider how to construct summary indices (e.g., quality-of-life [QOL] indices) for a social unit that will be endorsed by a majority of its citizens. They assume that many social indicators are available to describe the social unit, but individuals disagree about the relative weights to be assigned to each social indicator. The summary index that maximizes agreement among citizens can then be derived, along with conditions under which an index will be endorsed by a majority in the social unit. The authors show that intuition greatly underestimates the extent of agreement among individuals, and it is often possible to construct a QOL index that most citizens agree with (at least in direction). In particular, they show that the equal-weighting strategy is privileged in that it minimizes disagreement among all possible individuals' weights. They demonstrate these propositions by calculating real QOL indices for two surveys of citizens' actual importance weights.

Michael R. Hagerty

Papers

Quality of life indexes for national policy: Review and agenda for research

Wealth and Happiness Revisited--Growing National Income Does Go with Greater Happiness.

Rising Happiness in Nations 1946–2004: A Reply to Easterlin

Return Policies and the Optimal Level of "Hassle"

Constructing Summary Indices of Quality of Life: A Model for the Effect of Heterogeneous Importance Weights