What got me thinking about this is the fact that my car lease is ending and I'm shopping. The last three times I've leased a new car, the process of picking it up has been identical. I go in, pay some money, sign a bunch of forms I don't understand, get a tour of the car's features and then I'm told that I'll be getting a survey and that I should give the highest marks on everything. Sometimes the salesman says "if there is something you can't give the highest mark on, tell me what I have to do to earn it", but they always say, "If I don't get the highest mark it will hurt my commission."
I recognize that the car company might not view this or use this as they would pure market research. In many respects they are like response cards (like hotels or restaurants use) or invitations to do a survey found on receipts. Even without all the controls pure market research puts in place, the data generated by these efforts can have tremendous value. My firm, for example, has used them to help establish the bottom line impact of various attributes.
One of the painful experiences of my life occurred in early 1991 when I was a student at SUNY in Buffalo, New York. The Buffalo Bills were in their first Super Bowl playing the New York Giants and the game was down to the last seconds. Trailing 20-19 the Bills depended on their kicker Scott Norwood to kick a 47 yard field goal to win it all. I was one of those who was crushed when the kick sailed wide right by a yard. That was perhaps their best chance even though they went back to the Super Bowl (count ‘em) three more times and lost each one.
The question I have is would they have been more likely to win if that game was played today?
It is known that one way to become more creative is to shift one’s perspective.The best selling author of The Da Vinci Code Dan Brown, is said to hang upside down with gravity boots to help shift his perspective for the creativity needed in his novels. Travel is another helpful method for shifting perspective. There is now some new research to show that distance can be helpful in making a person more creative. But the research has an important and interesting qualifier.
Got an interesting question in my Linkedin morning update about the ethics of Market Researchers doing Market Intelligence work. While the question was vague enough to be unanswerable (what sort of Market Intelligence are you talking about?), it got me thinking about ethics. Specifically, I’ve been thinking that researchers are too often focused on strict ethical rules rather than on doing the right thing.
So, right off, let me state that I totally believe in obeying laws, regulations and, yes, ethics. This extends to our dealings with clients, vendors and, most importantly respondents. I wouldn’t want to work in an industry that doesn’t take ethical responsibility seriously. I'm concerned, however, that we don't apply ethical standards intelligently. This, in turn, works counter to the principles our ethics claim to protect and harms our effectiveness as an industry.
Telemarketers: Our Nemesis?
See if this sounds familiar. You and three other friends have gone to a nice restaurant for dinner. The waiter passes the menus around and you are eyeing the pork chops in some kind of fancy glazed sauce. The lamb chops sound nice too, but your preference is clearly for the pork chops. The waiter is going around the table taking orders. Your good friend who is ordering just before you goes for the pork chops. You hear that and decide to order the lamb chops because you don’t want to get the same thing your friend got. Sound familiar? Why does this happen? Why didn’t you choose your favorite dish? Do other people act this way? That’s what Dan Ariely and Jonathan Levav asked themselves. As researchers of consumer behavior, they are well qualified to search for the answer.
The answer is 60 million pounds. At least that’s the answer according to the UK Film Council that has started a novel program (an “audit”) to evaluate the value of creative people for their country. The first data point in the analysis was Kate Winslet and the process is now being referred to as the Winslet algorithm.
Ever wondered how paleontologists know what a dinosaur weighs? OK, me neither, but an article I read in The Economist points to mistakes in past methods and I believe understanding these mistakes can teach us a lot about how to be better researchers.
A dinosaur’s weight is estimated by taking the bone structure and weight of existing animals and then through linear regression predicting the weight of dinosaurs using only their bone structures. For example, a Brontosaurus (technically called an Apatosaurus, but I learned my dinosaur names watching The Flintstones) is estimated to weigh about as much as seven African elephants.
Dr. Gary Packard of Colorado State University wondered how well these equations would do at predicting the weight of living animals. In essence, he pretended we don’t know how much an elephant weighs. He took the weight and bone structure of smaller animals and then used a linear regression to predict an elephant’s weight using only its bone structure. The result was 50% more than an elephant weighs.
Back in the stone age when DVRs did not exist, everyone had to watch TV programs when they were broadcast. Many people still do and so can’t avoid commercial interruptions. Those who record their programs avoid commercials by fast forwarding through them. Why? Because commercials are usually annoying and it is more enjoyable to just watch the show, right? Maybe not, say some researchers. They argue that there is reason to believe that people’s enjoyment of certain shows will decrease over time and commercial interruptions can actually make the show more enjoyable. Research has shown this happens with many positive experiences such as enjoyable scenery, ice-cream, music and even winning the lottery. So, why not with TV watching?
I know what you are thinking. This sounds like a joke, but it is not. There really is a What-The-Hell Effect and we will get to it in a moment. First let’s talk about the Denomination Effect. Let’s say you are leaving home and want to carry some cash with you. You have the choice of either taking a $20 bill or $20 in smaller denominations. Should this make any real difference to how much you are likely to spend? After all $20 is $20, right? Not quite. Turns out the denomination in which money is carried does have an impact on spending behavior. Two researchers recently published an article detailing the effects and we’ll take a closer look at it here.
Does a person’s physical attractiveness influence their selection of romantic partners? Yes, of course. There is anecdotal and research-based evidence to support that. But there are several related questions that arise and require urgent answers. A group of researchers set out to find some answers using data from the website HOTorNOT.com and some common analytical techniques. Admittedly, this is not the most representative sample in the world, but for this purpose is quite acceptable. Let’s take a look at the questions and the answers.
How often do we as consumers see “just below” retail prices such as $2.99 or $29.99 or $299.99? All the time, right? It seems like we rarely ever see “round prices” for anything. The obvious reason why retailers and others do it is because of the belief that the left digit dominates and people are likely to see say, $2.99 as being significantly more than a penny less than $3.00. There are two issues here. The first is whether people actually perceive a difference and the second is whether it has an effect on what they purchase. Both of these issues can be studied experimentally and that’s what two sets of researchers did.
Let’s say you are following your dream to kick your day job and start a pizza joint. Many consequential decisions need to be made, but one that will certainly affect your production and display process will be the shape of the pizza: round or square? You might have personal preferences, but how will your customers see it? Given the same size, which shape will be seen as a better deal? Questions on package shapes often arise for consumer goods, but while pizza is ubiquitous, its shape has not been systematically investigated until recently. The broad area of inquiry is called psychophysical biases in area comparisons and three researchers considered the shape problem to figure out what a pizza parlor should do.
In his most recent book, Outliers, Malcolm Gladwell talks about the 10 year rule -- a minimum of about 10 years (or roughly 10,000 hours) of work is needed to gain expertise in any area. While the idea originates from research in the early part of the 20th century, the rule itself was formalized by Nobel Prize winner Herbert Simon and a colleague based on their study of chess. The definitive review and experimental confirmation comes from a great article in the nineties by the psychologist K. Anders Ericsson (a student of Simon) and colleagues. It is a very interesting article with plenty of information and gets to the basic idea of how to become an expert performer.
You can find plenty of people who will argue both sides and it can be difficult to disentangle the arguments and the data from personal biases. But what is hard to argue is that most of these discussions can get muddy very quickly unless you are well versed in the intricacies of economic data. What would be really nice is a user friendly (preferably animated) visualization of relevant data that tells us what is happening and is likely to happen. If you are looking for that you are in luck my friend.
I have previously written about Amanda Cox and the excellent graphics team at the NY Times. Well, they have done it again. They have taken a very interesting chart that is watched by OECD economists for changes in the economy and made it significantly better.
There are some occupations (such as doctors, teachers, firemen, social workers etc) where people find meaning or a purpose in their work. And then there are other occupations (you know who you are) where there isn’t quite as much meaning. At least that is the general understanding. Of course, it is possible to find meaning in the most pedestrian of occupations as long as one is able to link it with larger goals such as providing for one’s family. But the question is, can people be made to find meaning in such work even when such nobler goals are unavailable. That is, will the presence of a very simple “purpose” allow people to see work differently even when it appears meaningless on the surface? That’s the question asked by three researchers who answered it with the help of two simple experiments.
I like charts that show a lot of information in a simple, elegant way effectively summarizing a large table. Of course, it is nearly impossible to do that without animation. Here is a good example using life tables. You can see how life expectancies changed over the years. The prevalence of infant mortality in the earlier years is particularly clear. Click on the Survival tab to see the life expectancies at various points in time. As an added bonus you can enter your age and see how long your party will last!
Several research papers and a book have been published by Satoshi Kanazawa raising interesting questions and trying to answer them from an evolutionary biology perspective. For other such questions read this article in Psychology Today. Our question of the day concerns beautiful parents and their offspring. Based on his research Kanazawa asserts that beautiful parents have more daughters. Rather than debate the evolutionary basis of such a claim, the Columbia University statistician and blogger Andrew Gelman decided to look at the statistical basis of the claim. What he found has larger implication for general analysis of data.
Let's say you had the choice of giving one of two gift cards. One of them expires soon while the other expires much later. Which would be better to give? The latter, right? Not quite, say some behavioral economists. It appears that the one that expires sooner and therefore avoids procrastination makes people happier. That's right: people procrastinate even when it comes to pleasure. It could be that even with pleasures like using gift cards there are some costs associated (such as arranging for babysitting to go the spa) that loom much bigger in the immediate than in a distant future. So a spa visit in six months seems like a pleasure while one tomorrow looms (somewhat) ominously.
A common experience when shopping is to see price discounts expressed in percentage terms. "All items are 25% off". That's easy enough to understand. How about situations where you see signs that say "Take a further 15% off at the register"? This is where complications arise. If an item costs $100 and you see these two signs what do you think is the final discounted price of the item? Multiple percentage changes are often used by stores and for good reason. Recent research shows that consumers are not very good at calculating multiple percentage changes and in fact make predictable mistakes. The researchers show that these mistakes can be rectified in certain ways and that there is a clear economic cost to consumers when such mistakes are made.