Professor Jordan Louviere
Professor of Marketing, Marketing
Executive Director, Centre for the Study of Choice
BA (USL), MA (UNL), MCert (Iowa), PhD (UI)
Member, Institute for Operations Research and The Management Sciences
Member, American Marketing Association
Member, Australia and New Zealand Marketing Academy
Email: Jordan.Louviere@uts.edu.au
Phone: +61 2 9514 9799
Fax: +61 2 9514 9897
Room: CH01.04.217 (map)
Mailing address: PO Box 123,
Broadway NSW 2007,
Australia
Biography
CenSoC contact details: 645 Harris St, Room CH01.04, ph 9514 9799, fax 9514 9897
Jordan Louviere received his PhD from the University of Iowa in 1973. His career includes academic appointments at Florida State University, the University of Wyoming, the University of Iowa, the Australian Graduate School of Management, the University of Alberta, University of Utah, and and prior to joining UTS, he was Head of the Department of Marketing at the University of Sydney (1994-1999), and Director Research and Development at Memetrics Pty., Ltd (1999-2001), a technology startup that develops and applies measurement and modelling methods to evaluate the results of business activities in interactive channels. Currently, Jordan is Professor of Marketing in the Faculty of Business at UTS and Executive Director of the Centre for the Study of Choice (CenSoC). Jordan also is associated with the Centre for Health Economics Research and Evaluation (CHERE) at the University of Technology, and is one the senior team members of CHERE’s five-year National Health and Medical Research (NHMRC) Program Grant.
Jordan is internationally recognized as an expert in conjoint analysis and consumer choice modeling. He developed and pioneered the design and analysis of choice experiments and, up until 2006, has taught stated preference choice modelling and design of choice experiments with Moshe Ben-Akiva, Dan McFadden (McFadden shared the 2000 Nobel Prize in Economics for his pioneering work in choice modelling theory and applications) and others in the annual summer shortcourse in choice modeling at the Massachusetts Institute of Technology (MIT).
Jordan has authored or co-authored more than 150 scholarly publications, including books, book chapters, journal articles and working papers dealing with Consumer Choice Models, Design of Experiments, Discrete Multivariate Analysis, Marketing Research Methods, Consumer Behavior, Marketing Strategy and Planning, Transportation Planning, Demand Forecasting, Brand Equity Analysis, Measurement of Service Quality, Retailing and Consumer Services and Marketing Management, to name a few. He has lectured and given seminars at many major universities and conferences on modeling and analyzing individual and group decisions. Jordan currently is on the editorial boards of the Journal of Retailing, Journal of Retailing and Consumer Services and the Quarterly Journal of Electronic Commerce. He previously served on the editorial boards of the Journal of Marketing Research, Journal of Consumer Research and Transportation Research, and recently co-authored (with David Hensher and Joffre Swait) Stated Choice Methods: Analysis and Application published by Cambridge University Press (2000).
In addition to academic activities, Jordan has consulted with private and public sector organizations on his own and in association with major consulting groups like Mercer Management Consultants (Boston), KPMG (Melbourne), DBM Consultants (Melbourne), Dangar Research (Sydney), and many more. In that capacity Jordan worked for numerous major clients in Australia, Canada, Europe, New Zealand, Southeast Asia and the United States, such as Bell Northern Research (Canada), Edmonton Transit (Canada), Alberta Forest Products Association (Canada), The Premiere's Office of Victoria (Australia), Pizza Hut (Australia), Colgate (Australia), Telstra (Australia), Australian Bureau of Transport (and Communications) Economics, AVCO Finance (Australia), National Australia Bank, DEC Corporation (USA), Disney World (USA), AT&T (USA), US West (USA), Kalium Chemicals (USA), Marriott Corporation (USA), Texaco (USA), American President Lines (USA), NYNEX (USA), Mazda (USA), Kia Corporation (USA), Kellogg (Australia), Qantas Airways, Ltd. (AUSTRALIA), the Boeing Corporation (USA), and many more.
Professional
Professor Louviere is Director, Research Programs, in the School of Marketing.
He is the 2010 winner of the Charles Coolidge Parlin Marketing Research Award, given by the American Marketing Association and AMA Foundation to "distinguished academics and practitioners (who) have demonstrated outstanding leadership and sustained impact on advancing the evolving profession of marketing research over an extended period of time."
At the 2007 conference of the Australian and New Zealand Marketing Academy (ANZMAC) it was announced that Professor Louviere was to be honoured as a Fellow of the Academy. In being awarded this title, Professor Louviere joins an elite group of scholars who have made an outstanding contribution to the marketing discipline.
Teaching areas
Choice Modelling
Research
Research interests
Marketing Research/Research Methods;
Quantitative Analysis of Consumer Behaviour;
Quantitative Methods, Especially Multivariate Statistics, Experimental Design and Marketing Models;
Consumer Judgment, Decision Making, and Choice Behaviour;
New Product Development, Planning and Marketing;
Choice Modeling and the Design of Choice Experiments;
Stated Preference Theory and Methods
Projects
Selected Peer-Assessed Projects
The Value of Characteristics of Australian Wheat
The paradox of choice: Unravelling complex superannuation decisions
Experiments in the Dynamics of Preference and Choice in an Evolving Social Network
Latent variable modelling of discrete choice experiments
Strategic Service Innovation: The Role of Heterogeneity in Substantive and Dynamic Capabilities
ATN Centre For Metabolic Fitness
Profiling Accurate Segmentation Structures in Rural Communities
Information Provision and the Valuation of Social Issues
Modelling the Choices of Individuals
Publications
Research books chapters
Crouch, G., Devinney, T.M. & Louviere, J.J. 2012, 'Developments in Space Tourism: Current and Future Research' in Cathy HC Hsu and William C Gartner (eds), The Routledge Handbook of Tourism Research, Routledge, NY, NY, pp. 339-356.
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The first space tourist, Dennis Tito, paid for a seat on a Russian Soyuz rocket and spent a week at the International Space Station in April 2001. A year later, mark Shuttleworth repeated this experience. A third space tourist, Lance Bass had been training for a similar space trip scheduled for October 2012 until negotiations broke down between Bass' representitives and the Russian Space Agency broke down. The NASA Shuttle Columbia disaster in Febuary 2003 resulted in the cessation of futher shuttle flights for a considerable period and the suspension, at the time, of further flights by the would-be orbital space tourists.
Auger, P., Devinney, T.M. & Louviere, J.J. 2010, 'Global segments of socially conscious consumers: Do they exist?' in Smith, NC; Bhattacharya, CB; Vogel, D; Levine, DI (eds), Global Challenges in Responsible Business, Cambridge University Press, Cambridge, UK, pp. 135-160.
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There is little doubt that corporate social responsibility (CSRj has gained in importance over the last decade leading firms to develop increasingly sopbisticated CSR strategies for their organizations.' The challenges facing managers are nothing short of daunting given the vast number of issues that fall under the rubric of CSR and the equally large number of often conflicting groups pressuring compan ies to be more socially responsible.2 The situation is even more complex for Jarge and weH-known multinational enterprises (MNEs) with operations that often span the globe and expose the organization to a wide range of economic, social, development and political conditions.
Carson, R. & Louviere, J.J. 2010, 'Experimental design and the estimation of willingness to pay in choice experiments for health policy evaluation' in McIntosh, E; Clarke, PM; Frew, EJ; Louviere, JJ (eds), Applied Methods of Cost-Benefit Analysis in Health Care, Oxford University Press, New York, pp. 185-210.
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This chapter focuses on stated preferences obtained from discrete choice experiments (DCEs also known as SPDCEs). as opposed to data that reflect real market choices (revealed preferences (RP) as discussed in Chapter 9). DCEs try to simulate the essential elemen1s of real market options that consumers might tace in the future. Unlike real market cholee datal DeEs rely on constructed markets in which key factors that arc hypothesized to drive choices arc systematically varied. 1'0 the extent that the consumers in a DCE make chokes in a manner consistent with the way in which they would ael uaUy choose in a real market, onc can derive standard welfare estimates for policy changes. The remainder of this cbapter is devoted to discussing and illustrating how this can be accomplished with DeBs, More details on DCEs can be found in Louviere, Hemher, anJ Swait (l).
Louviere, J.J. & Fiebig, D.G. 2010, 'Benefit assessment for cost-benefit analysis studies in health care using discrete choice experiments: Estimating welfare in a health care setting' in McIntosh, E; Clarke, PM; Frew, EJ; Louviere, JJ (eds), Applied Methods of Cost-Benefit Analysis in Health Care, Oxford University Press, New York, pp. 211-229.
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The purpose of this chapter is to introduce the idea of using stated preference discrete choke experiments (SPDCEs) for valuation and welfare estimation, We begin by discussing SPDCEs and the random utility theory-based choice models that wlderHe their analysis. Given the purpose of this handbook, this naturally then leads to a dis~ (ussion of how to use choice models estimated from $PDCEs to carry out valuation and welfare analysis,
Gerard, K., Shanahan, M. & Louviere, J.J. 2008, 'Using Discrete Choice Modelling to Investigate Breast Screening Participation' in Mandy Ryan, Karen Gerard, Mabel Amaya-Amaya (eds), Using Discrete Choice Experiments to Value Health and Health Care, Springer, Dordrecht, The Netherlands, pp. 117-137.
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The aim of this chaptcr is to show how discrete choice experiments (DCEs) can be applied to exarnine the preferences of women reinvited for breast screening and to use the results in developing breast screening participation enhancement stralegies.
Louviere, J.J. & Meyer, R.J. 2008, 'Formal Choice Models of Informal Choices: What Choice Modeling Research Can (and Can't) Learn from Behavioral Theory' in Malhotra NK (ed), Review of Marketing Research vol 4, M.E. Sharpe, New York, USA, pp. 3-32.
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In this paper we illustrate the benefits of forging a better alliance among behavioral, economic, and statistical approaches to modeling consumer choice behavior. We focus on the problems that arise when building descriptive models of choice in evolving markets, where consumers are likely to have poorly developed preferences and be influenced by beliefs about future market changes. We illustrate how understanding the actual process that is driving preferences can provide analysts with both better a priori insights into the model structures that are likely to provide the best descriptive account of choices in such settings, as well as how stable these structures are likely to be over time. We show, for example, that analogical reasoning heuristics+a common strategy for making decisions under preference uncertainty+can produce choice patterns that resemble the output of complex nonlinear, nonadditive, multi-attribute utility rules. Likewise, because novice consumers are likely to display strong individual differences in the variance of unobserved components of utility, methods that fail to recognize such differences will tend to overstate the actual extent of taste heterogeneity that exists in a population. We also illustrate the benefits of a reverse dialogue, examining how economic theory can lead behavioral researchers to more parsimonious explanations for apparent anomalies in choice tasks where preferences are uncertain. We show, for example, that some ad hoc models that have been used to statistically describe the compromise effect in choice can be deduced from first principles of rational risky decision making.
Street, D., Burgess, L.B., Viney, R.C. & Louviere, J.J. 2008, 'Designing Discrete Choice Experiments for Health Care' in Ryan,M; Gerard, K; Amaya-Amaya, M. (eds), Using Discrete Choice Experiments to Value Health and Health Care, Springer, Dordrecht, The Netherlands, pp. 47-72.
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As noted in Chapter 1, the application of discrete choice experiments (DCEs) in health economics has seen an increase over the last few years.While the number of studies using DCEs is growing, there has been relatively limited consideration of experimental design theory and methods. Details of the development of the designed experiment are rarely discussed. Many studies have used small fractional factorial designs (FFDs), generated with commercial design software packages, e.g. orthogonal main effects plans (OMEPs), sometimes manipulated in ad hoc ways (e.g. randomly pairing up scenarios or taking one scenario from the design and combining it with every other scenario). Such approaches can result in designs with unknown statistical design properties, in particular with unknown correlations between parameter estimates.
Auger, P., Devinney, T.M. & Louviere, J.J. 2007, 'Measuring the importance of ethical consumerism: A multi-country empirical investigation' in Hooker, J; Hulpke, JF; Madsen, P (eds), Controversies in International Corporate Responsibility, Carnegie Mellon University - Philosophy Documentation Center, Charlottesville, USA, pp. 207-221.
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Burgess, L.B., Street, D., Viney, R.C. & Louviere, J.J. 2006, 'Design of choice experiments in health economics' in Jones, A M (eds), The Elgar Companion to Health Economics, Edward Elgar, Cheltenham, UK, pp. 415-426.
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Louviere, J.J., Street, D. & Burgess, L.B. 2004, 'A 20+ years' retrospective on choice experiments' in Wind, Y; Green, P E (eds), Marketing Research and Modeling: Progress and Prospects, Kluwer Academic Publishers, Boston, pp. 201-214.
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Paul Green inspired many of us who work in conjoint analysis and related areas, such as stated preference discrete choice experiments, and all of us who undertake research in understanding and modelling preferences have benefited from his work. Knowing Paul Green, his impact and contributions will continue during his "returement". Our thanks to him for so many of the advances that we now often take for granted, but without which we would not be where we are today. In tribute to Paul Green, this paper provides a bried history of choice experiments, how the results of choice experiments relate to real market behaviour,. and progress that has been made int he design of choice experiments. We concludee by discussing several aspects of choice experimens, such as the interacctions of subjects with experiments, model complexity and the scientific understanding of choice behaviour compared with mere predictions of choices.
Blamey, R., Louviere, J.J. & Bennett, J.W. 2001, 'Choice Set Design' in Bennett J; Blamey R (eds), The Choice Modelling approach to Environment Valuation, Edward Elgar Publishing, Cheltenham, UK, pp. 133-156.
Blamey, R., Bennett, J.W., Louviere, J.J. & Morrison, M.D. 2001, 'Green Product Coice' in Bennett J; Blamey R (eds), The Choice Modelling approach to Environment Valuation, Edward Elgar Publishing, Cheltenham, UK, pp. 115-132.
Crouch, G.I. & Louviere, J.J. 2001, 'A Review of Choice Modelling Research in Tourism, Hospitality and Leisure' in Mazanec JA; Crouch GI; Ritchie B; Woodside AG (eds), Consumer Psychology of Tourism, Hospitality and Leisure, CABI Publishing, New York, USA, pp. 67-86.
Dellaert, B.G., Borgers, A.W., Louviere, J.J. & Timmermans, H.J. 2001, 'Conjoint Preference Elicitation Methods in the Broader Context of Random Utility Theory Preference Eliciation Methods' in Gustafson A; Hermann A; Huber F (eds), Conjoint Measurement: Methods and Applications, Springer-Verlag, Berlin, Germany, pp. 305-344.
Louviere, J.J. 2001, 'Choice Experiments: An Overview of Concepts and Issues' in Bennett J; Blamey R (eds), The Choice Modelling approach to Environment Valuation, Edward Elgar Publishing, Cheltenham, UK, pp. 13-36.
Louviere, J.J. & Hensher, D. 2001, 'Combining Data Sources' in Hensher D (ed), Travel Behaviour Research: The Leading Edge, Pergamon Press, Oxford, UK, pp. 247-258.
Louviere, J.J. & Hensher, D. 2001, 'Combining Sources of Preference Data' in Hensher D (ed), Travel Behaviour Research: The Leading Edge, Pergamon Press, Oxford, UK, pp. 125-144.
Louviere, J.J., Hensher, D. & Swait JR, J.D. 2001, 'Using Conjoint Choice Experiments to Model Consumer Choices of Product Component Packages' in Gustafson A; Hermann A; Huber F (eds), Conjoint Measurement: Methods and Applications, Springer-Verlag, Berlin, pp. 387-414.
Louviere, J.J. & Street, D. 2000, 'Stated-preference Methods' in David A Hensher & Kenneth J Button (eds), Handbook of Transport Modelling, Pergamon Press, Amsterdam, Netherlands, pp. 131-143.
Refereed journal articles
Buchanan, J.D., Prescott, A.E., Schuck, S.R., Aubusson, P.J., Burke, P.F. & Louviere, J.J. 2013, 'Teacher retention and attrition: Views of early career teachers', The Australian Journal of Teacher Education, vol. 38, no. 3, pp. 112-129.
Lancsar, E., Louviere, J.J., Currie, G., Donaldson, C. & Burgess, L.B. 2013, 'Best Worst Discrete Choice Experiments in Health: Methods and an Application', Social Science & Medicine, vol. 76, pp. 74-82.
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A key objective of discrete choice experiments is to obtain sufficient quantity of high quality choice data to estimate choice models to be used to explore various policy/clinically relevant issues. This paper focuses on a relatively new form of choice experiment, `Best Worst Discrete Choice Experiments+ (BWDCEs) and their relevance to health research as a new way to meet such an objective. We explain what BWDCEs are, how and when to apply them and we present several analytical approaches to model the resulting data. We demonstrate this preference elicitation approach in an empirical application exploring preferences of 898 members of the general public in Edmonton and Calgary, Canada for treatment of cardiac arrest occurring in a public place and show the gains achieved compared to traditional analysis of first best data. We suggest that BWDCEs are a valuable way to investigate preferences in the health sector and discuss implications for task design, analysis and areas for future research.
Bateman, H., Eckert, C., Geweke, J., Louviere, J.J., Thorp, S.J. & Satchell, S. 2012, 'Financial competence and expectations formation: Evidence from Australia', The Economic Record, vol. 88, no. 280, pp. 39-63.
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We study the financial competence of Australian retirement savers using self-assessed and quantified measures. Responses to financial literacy questions show large variation and compare poorly with some international surveys. Basic and sophisticated financial literacy vary significantly with most demographics, self-assessed financial competence, income, superannuation accumulation and net worth. General numeracy scores are largely constant across gender, age, higher education and income. Financial competence also significantly affects expectations of stock market performance. Using a discrete choice model, we show that individuals with a higher understanding of risk, diversification and financial assets are more likely to assign a probability to future financial crises rather than expressing uncertainty.
Eckert, C., Louviere, J.J. & Islam, T. 2012, 'Seeing the forest despite the trees: Brand effects on choice uncertainty', International Journal of Research in Marketing, vol. 29, no. 3, pp. 256-264.
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Prior research on brand equity suggests that consumers use brands as signals to reduce uncertainty and perceived risk. Erdem and Swait (1998) developed a conceptual framework based on information economics and signaling theory to explain how equity is created, maintained and transferred over time that involves seven theoretical constructs. This paper reviews the impact of brand-equity-associated brand utility on the scale of the indirect utility function (i.e., the inverse of the error variance); we argue that higher brand-equity-associated brand utility reduces the need for consumers to review previously formed preferences. We combine a brand utility experiment with a brand feature experiment to estimate the effects of brand-equity-associated brand utility scores on choice. We find that higher brand-equity-associated brand utility leads to higher choice consistency, which can drive increases in market share.
Khushaba, R.N., Greenacre, L.M., Kodagoda, S., Louviere, J.J., Burke, S. & Dissanayake, G. 2012, 'Choice modeling and the brain: A study on the Electroencephalogram (EEG) of preferences', Expert Systems with Applications, vol. 39, no. 16, pp. 12378-12388.
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Choice conjures the idea of a directed selection of a desirable action or object, motivated by internal likes and dislikes, or other such preferences. However, such internal processes are simply the domain of our human physiology. Understanding the physiological processes of decision making across a variety of contexts is a central aim in decision science as it has a great potential to further progress decision research. As a pilot study in this field, this paper explores the nature of decision making by examining the associated brain activity, Electroencephalogram (EEG), of people to understand how the brain responds while undertaking choices designed to elicit the subjects+ preferences. To facilitate such a study, the Tobii-Studio eye tracker system was utilized to capture the participants+ choice based preferences when they were observing seventy-two sets of objects. These choice sets were composed of three images offering potential personal computer backgrounds. Choice based preferences were identified by having the respondent click on their preferred one. In addition, a brain computer interface (BCI) represented by the commercial Emotiv EPOC wireless EEG headset with 14 channels was utilized to capture the associated brain activity during the period of the experiments. Principal Component Analysis (PCA) was utilized to preprocess the EEG data before analyzing it with the Fast Fourier Transform (FFT) to observe the changes in the main principal frequency bands, delta (0.5+4 Hz), theta (4+7 Hz), alpha (8+12 Hz), beta (13+30 Hz), and gamma (30+40 Hz). A mutual information (MI) measure was then used to study left-to-right hemisphere differences as well as front-to-back difference.
Louviere, J.J., Day, B., Bateman, I.J., Carson, R., Dupont, D.P., Morimoto, S., Wang, P.Z. & Scarpa, R. 2012, 'Ordering Effects and Choice Set Awareness in Repeat-Response Stated Preference Studies', Journal of Environmental Management, vol. 63, pp. 73-91.
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We present an experiment designed to investigate the presence and nature of ordering effects within repeat-response stated preference (SP) studies. Our experiment takes the form of a large sample, full-factorial, discrete choice SP exercise investigating preferences for tap water quality improvements. Our study simultaneously investigates a variety of different forms of position-dependent and precedent-dependent ordering effect in preferences for attributes and options and in response randomness. We also examine whether advanced disclosure of the choice tasks impacts on the probability of exhibiting ordering effects of those different types. We analyze our data both nonparametrically and parametrically and find robust evidence for ordering effects. We also find that the patterns of order effect in respondents+ preferences are significantly changed but not eradicated by the advanced disclosure of choice tasks a finding that offers insights into the choice behaviors underpinning order effects.
Menictas, C., Wang, P.Z. & Louviere, J.J. 2012, 'Assessing the validity of brand equity constructs', Australasian Marketing Journal, vol. 20, no. 1, pp. 3-8.
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This paper tests both the internal and external validity of the Erdem and Swait (1998) brand equity framework using two measurement modelling approaches, namely the relatively new Best-Worst scaling (BWS) method (Finn and Louviere, 1992; Marley and Louviere, 2005) and the more traditional confirmatory factor analysis (CFA) method. Data were collected from the Australian banking and mobile services sectors. We find the measurement models derived from BWS outperformed the models based on CFA of the rating data in predicting both stated and real brand choices. The findings have implications for both academics and practitioners in brand equity measurement and management
Bateman, H., Islam, T., Louviere, J.J., Satchell, S.E. & Thorp, S.J. 2011, 'Retirement Investor Risk Tolerance in Tranquil and Crisis Periods: Experimental Survey Evidence', Journal of Behavioral Finance, vol. 12, no. 4, pp. 201-218.
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The impact of the global financial crisis of 2008 and 2009 on private pension assets has been severe. Asset prices crashed on a scale not seen since the Great Depression of the 1930s. The OECD estimates that global assets accumulated to finance retirement fell by 20-25% over 2008. Ireland felt the greatest impact, where pension assets fell by around 35%, but the United States was close behind with an estimated decline of 25-30%, followed by falls of around 20% in Canada and Australia (Antolin & Stewart 2009). Individual pension accumulations felt the brunt of the impact: in the United States, the average defined contribution plan balance fell by 16%, from $31,800 in 2007 to $26,578 by mid 2009 (Copeland 2009).
Carson, R. & Louviere, J.J. 2011, 'A Common Nomenclature For Stated Preference Elicitation Approaches', Environmental & Resource Economics, vol. 49, no. 4, pp. 539-559.
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It is often difficult to determine what actually was done in work involving data collected with stated preference surveys because the terms used to describe various procedures have ambiguous and sometimes conflicting meanings. Further, terms used to desc
Hoek, J., Wong, C., Gendall, P., Louviere, J.J. & Cong, K. 2011, 'Effects of dissuasive packaging on young adult smokers', Tobacco Control, vol. 20, no. 3, pp. 183-188.
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Background Tobacco industry documents illustrate how packaging promotes smoking experimentation and reinforces existing smokers behaviour. Plain packaging reduces the perceived attractiveness of smoking and creates an opportunity to introduce larger pictorial warnings that could promote cessation-linked behaviours. However, little is known about the effects such a combined policy measure would have on smokers+ behaviour. Methods A 3 (warning size) *4 (branding level) plus control (completely plain pack) best-worst experiment was conducted via face-to-face interviews with 292 young adult smokers from a New Zealand provincial city. The Juster Scale was also used to estimate cessationlinked behaviours among participants. Results Of the 13 options tested, respondents were significantly less likely to choose those featuring fewer branding elements or larger health warnings. Options that featured more branding elements were still preferred even when they also featured a 50% health warning, but were significantly less likely to be chosen when they featured a 75% warning. Comparison of a control pack representing the status quo (branded with 30% front of pack warning) and a plain pack (with a 75% warning) revealed the latter would be significantly more likely to elicit cessation-related behaviours. Conclusions Plain packs that feature large graphic health warnings are significantly more likely to promote cessation among young adult smokers than fully or partially branded packs. The findings support the introduction of plain packaging and suggest use of unbranded package space to feature larger health warnings would further promote cessation.
Hoek, J., Gendall, P. & Louviere, J.J. 2011, 'Rationalisation as delusion: pictorial health warnings and tobacco industry arguments', The Journal of Consumer Marketing, vol. 28, no. 7, pp. 476-483.
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Purpose : The tobacco industry consistently opposes measures that would limit their marketing, but provides little empirical evidence to support its position. This paper aims to test claims that pictorial health warnings on tobacco products would be no more effective than text-only warnings.
Lee, J.A., Soutar, G., Daly, T.M. & Louviere, J.J. 2011, 'Schwartz Values Clusters in the United States and China', Journal of Cross-Cultural Psychology, vol. 42, no. 2, pp. 234-252.
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People differ in the importance they place on values. However, most research has selected a few values and examined their relationships with one or more variable(s) of interest. The current research differs as it examined subgroups of people who differ in the importance they attached to Schwartz+s values. Data collected from matched samples of adult international travelers (Study 1) and young adults (Study 2) produced very similar subgroups in the United States and China that reflected Schwartz+s shared motivational orientations of adjacent values in a similar manner to how we would expect individuals to differ in their personal values priorities. The subgroups had all the expected relationships with travel benefits, status consumption, and materialism in the United States and some of these expected relationships in China.
Louviere, J.J., Rungie, C. & Coote, L. 2011, 'Structural Choice Modelling: Theory and Applications to Combining Choice Experiments', Journal of Choice Modelling, vol. 4, no. 3, pp. 1-29.
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We propose and describe a comprehensive theoretical framework that integrates choice models and structural equation models. Referred to as +structural choice modelling,+ the framework easily combines data from separate but related choice experiments. We describe the mathematical properties of the new framework, including goodness-of-fit and identification and we illustrate how to apply the framework with three empirical examples. The examples demonstrate new ways to evaluate choice processes and new ways to test substantive theory using choice experiments. We show how to combine choice experiments within the same model where there is a common research question, yet the designs and nature of the experiments differ. The seemingly simple notion of combining two or more choice tasks for the same people offers considerable potential to develop and test theory, as illustrated with the new framework.
Putten, v.E., Jennings, S.M., Louviere, J.J. & Burgess, L.B. 2011, 'Tasmanian landowner preferences for conservation incentive programs: A latent class approach', Journal of Environmental Management, vol. 92, no. 10, pp. 2647-2656.
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An empirical model of landowners' conservation incentive program choice is developed in which information about landowners' socio-economic and property characteristics and their attitudes, is combined with incentive program attributes. In a Choice survey landowners were presented with the choice of two incentive programs modelled as 'bundles of attributes' mimicking a voluntary choice scenario. Landowner behaviour and decision and the type of conditions and regulations they preferred were analyzed. Based on choice survey data, landowner heterogeneity was accounted for using a latent class approach to estimate the preference parameters. Three latent classes of landowners with different attitudes to the role and outcome of establishing conservation reserves on private land were identified: multi-objective owners: environment owners: and production owners. Only a small proportion of landowners, mostly environment owners, would voluntarily join a program. Although compensation funding contributed to voluntary program choice for multi-objective owners and environment owners, welfare losses were around 4000 AUD per hectare, which is less than the average agricultural land value in Tasmania. Landowners for whom compensation funding contributed to voluntary program choice were also most likely to set aside land for conservation without payment. This raises the possibility that the government's compensation expenditure could potentially be either reduced or re-allocated to landowners who will not voluntarily take conservation action. Increasing participation in conservation incentive programs and minimizing the welfare losses associated with meeting conservation targets may be best achieved by offering programs that allow flexibility in terms of legal arrangements and other program attributes.
Scarpa, R., Notaro, S., Louviere, J.J. & Raffaelli, R. 2011, 'Exploring Scale Effects of Best/Worst Rank Ordered Choice Data to Estimate Benefits of Tourism in Alpine Grazing Commons', American Journal of Agricultural Economics, vol. 93, no. 3, pp. 813-828.
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In many environmental valuation applications standard sample sizes for choice modelling surveys are impractical to achieve. One can improve data quality using more in-depth surveys administered to fewer respondents.We report on a study using high quality rank-ordered data elicited with the bestworst approach. The resulting +exploded logit+ choice model, estimated on 64 responses per person, was used to study the willingness to pay for external benefits by visitors for policies which maintain the cultural heritage of alpine grazing commons.We find evidence supporting this approach and reasonable estimates of mean WTP, which appear theoretically valid and policy informative.
Auger, P., Devinney, T.M. & Louviere, J.J. 2010, 'The importance of social consumerism across eight countries', Zeitschrift fur Betriebswirtschaft (ZfB), vol. 80, no. Special 1, pp. 23-37.
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This paper descrihes the results of scvcrallarge empirical studies that investigated the impact ofsocial product attributes on consumer purchase intentions. Our results show that some consumers are willing to pay for more socially acceptable products, but that most ofthose consumers do not know about the social product features ofthe products they purchase. Furthermore, our analyses demonstrate that consumers can be segmented based on their preferences for (or against) social product features and that these segments are not country specific and do not relate well to observable demographic factors.
Auger, P., Devinney, T.M., Louviere, J.J. & Burke, P.F. 2010, 'The importance of social product attributes in consumer purchasing decisions: A multi-country comparative study', International Business Review, vol. 19, no. 2, pp. 140-159.
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This paper examines the role that social attributes+environmental and labour conditions+play in product choice across a range of developed and emerging economies. We use a multi-attribute design to force consumers to not only trade-off social attributes with tangible attributes but also make trade-offs with other intangible attributes, namely brand and country of origin. Our results show that: (1) social attributes are generally more influential in developed than in emerging economies, (2) the importance of social attributes holds across high and low involvement products, and (3) social attributes can influence product choice even when other intangible attributes are included in the design. We believe that our results offer a more accurate picture of the role of social attributes since they are based on a multi-cue, multi-product design that forced consumers to make tradeoffs between tangible and intangible attributes.
Bateman, H., Louviere, J.J., Thorp, S.J., Islam, T. & Satchell, S. 2010, 'Investment decisions for retirement savings', Journal of Consumer Affairs, vol. 44, no. 3, pp. 463-482.
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We conducted a choice experiment to investigate whether retirement savers follow simple portfolio theory when choosing investments. We modeled experimental survey data on 693 participants using a scale-adjusted version of the latent class choice model. Results show that underlying variability in response was explained by age and +risk profile+ score and that preferences varied with income and age. Younger individuals were conventionally risk averse, but older, higher-income individuals may react positively to both higher returns and increasing risk, when risk is presented as widening ranges of possible outcomes. Respondents tended to choose among a few similar investment options.
Burke, P.F., Burton, C.T., Huybers, T., Islam, T., Louviere, J.J. & Wise, C. 2010, 'The scale-adjusted latent class model: Application to museum visitation', Tourism Analysis, vol. 15, no. 2, pp. 147-165.
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Preferences of tourists and visitors are varied in a number of markets, making it difficult for managers to understand how underlying segments might respond to changes in service offerings. Market segments differ in preferences for specific features, as well as how consistently they make their choices. In this article, we illustrate recent developments in choice modeling that allows for simultaneously modeling feature preferences and consistency of choice. We use the Scale-Adjusted Latent Class Model (SALCM) to better understand choices in the context of a research project conducted in collaboration with six major Australian museums involving a sample of 3,685 museum visitors. We identify three preference classes of museum-goers that explain preferences for levels of26 museum attributes: Life Force (two thirds of visitors), Educated Thinkers, and Wealthy At-Homes. Our results indicate sensitivity to general entry prices, including preference for free entry or entry "by donation." Tours are preferred if smaller, lengthier, and conducted by paid museum staff. Not unexpectedly, the findings suggest that museums should cater for children, with some classes responding positively to providing supervised child areas. Most visitors prefer museums that are dynamic, offer new experiences, and regularly update permanent displays. However, the three classes identified have different overall experience preferences; for example, Educated Thinkers see museums as an educational opportunity, but Wealthy At-Homes prefer entertaining experiences. Incentives for return visits and cross-museum promotional offers are valued by the Life Force class, but have little effect on Educated Thinkers. The SALCM approach may be attractive to other areas of tourism analysis, especially where offerings contain many attributes and potential market segments are difficult to define and understand.
Carson, R., Louviere, J.J. & Wei, X. 2010, 'Alternative Australian climate change plans: The public's views', Energy Policy, vol. 38, no. 2, pp. 902-911.
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Climate change has come to the forefront of Australian politics and there is now an active on-going policy debate about how to best reach a commonly agreed long term goal. This paper looks at five major dimensions of this debate and constructs policy options based on them. A discrete choice experiment approach was used with a representative sample from a major internet panel provider. Survey respondents made choices between pairs of policy options with different characteristics. They favored policies starting in 2010 rather than 2012, and spending 20% of revenue raised on energy-related R&D. They were almost evenly split on whether the plan should initially exempt the transport sector and two competing approaches that redistribute revenue from the plan, and, they opposed plans giving special treatment to energy-intensive sectors of the economy. A number of other policy relevant questions related to understanding Australian views and knowledge related to climate change also were asked.
Fiebig, D.G., Keane, M., Louviere, J.J. & Wasi, N. 2010, 'The generalised multinomial logit model: Accounting for scale and coefficient heterogeneity', Marketing Science, vol. 29, no. 3, pp. 393-421.
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The mixed or heterogeneous multinomial logit (MIXL) model has become popular in a number of fields, especially marketing, health economics, and industrial organization. In most applications of the model, the vector of consumer utility weights on product attributes is assumed to have a multivariate normal (MVN) distribution in the population. Thus, some consumers care more about some attributes than others, and the IIA property of multinomial logit (MNL) is avoided (i.e., segments of consumers will tend to switch among the subset of brands that possess their most valued attributes). The MIXL model is also appealing because it is relatively easy to estimate. Recently, however, some researchers have argued that the MVN is a poor choice for modelling taste heterogeneity. They argue that much of the heterogeneity in attribute weights is accounted for by a pure scale effect (i.e., across consumers, all attribute weights are scaled up or down in tandem). This implies that choice behaviour is simply more random for some consumers than others (i.e., holding attribute coefficients fixed, the scale of their error term is greater). This leads to a "scale heterogeneity" MNL model (S-MNL). Here, we develop a generalized multinomial logit model (G-MNL) that nests S-MNL and MIXL. By estimating the S-MNL, MIXL, and G-MNL models on 10 data sets, we provide evidence on their relative performance. We find that models that account for scale heterogeneity (i.e., G-MNL or S-MNL) are preferred to MIXL by the Bayes and consistent Akaike information criteria in all 10 data sets. Accounting for scale heterogeneity enables one to account for "extreme" consumers who exhibit nearly lexicographic preferences, as well as consumers who exhibit very "random" behaviour (in a sense we formalize below).
Flynn, T.N., Louviere, J.J., Peters, T.J. & Coast, J. 2010, 'Using discrete choice experiments to understand preferences for quality of life. Variance-scale heterogeneity matters', Social Science & Medicine, vol. 70, no. 12, pp. 1957-1965.
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Health services researchers are increasingly using discrete choice experiments (DCEs) to model a latent variable, be it health, health-related quality of life or utility. Unfortunately it is not widely recognised that failure to model variance heterogeneity correctly leads to bias in the point estimates. This paper compares variance heterogeneity latent class models with traditional multinomial logistic (MNL) regression models. Using the ICECAP-O quality of life instrument which was designed to provide a set of preference-based general quality of life tariffs for the UK population aged 65+¥, it demonstrates that there is both mean and variance heterogeneity in preferences for quality of life, which covariate-adjusted MNL is incapable of separating. Two policy-relevant mean groups were found: one group that particularly disliked impairments to independence was dominated by females living alone (typically widows). Males who live alone (often widowers) did not display a preference for independence, but instead showed a strong aversion to social isolation, as did older people (of either sex) who lived with a spouse. Approximately 6e10% of respondents can be classified into a third group that often misunderstood the task. Having a qualification of any type and higher quality of life was associated with smaller random component variances. This illustrates how better understanding of random utility theory enables richer inferences to be drawn from discrete choice experiments. The methods have relevance for all health studies using discrete choice tasks to make inferences about a latent scale, particular QALY valuation exercises that use DCEs, best-worst scaling and ranking tasks.
Louviere, J.J., Flynn, T.N. & Carson, R. 2010, 'Discrete choice experiments are not conjoint analysis', Journal of Choice Modelling, vol. 3, no. 3, pp. 57-72.
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We briefly review and discuss traditional conjoint analysis (CA) and discrete choice experiments (DCEs), widely used stated preference elicitation methods in several disciplines. We pay particular attention to the origins and basis of CA, and show that it is generally inconsistent with economic demand theory, and is subject to several logical inconsistencies that make it unsuitable for use in applied economics, particularly welfare and policy assessment. We contrast this with DCEs that have a long-standing, well-tested theoretical basis in random utility theory, and we show why and how DCEs are more general and consistent with economic demand theory. Perhaps the major message, though, is that many studies that claim to be doing conjoint analysis are really doing DCE.
Louviere, J.J. & Flynn, T.N. 2010, 'Using best-worst scaling choice experiments to measure public perceptions and preferences for healthcare reform in Australia', The Patient: patient-centered outcomes research, vol. 3, no. 4, pp. 275-283.
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Background: One of the greatest difficulties in evaluating healthcare system reform in any country is that governments often do not clearly articulate what it is they are attempting to do. In Australia, a recent inquiry set out 15 principles to guide the reform process, but it remains unclear how the Australian public values the principles, how such values vary across the country, and, more fundamentally, if Australians understand the principles. Objectives: To evaluate the Australian healthcare reform principles from the perspective of the Australian public, to test if such preferences are valued consistently across geographic and socioeconomic strata, and to test for the degree of understanding of the principles among the public. Methods: We employed best-worst scaling (BWS), a stated-preference method grounded in random utility theory, to elicit public preference for 15 healthcare reform principles. The BWS tasks were incorporated into an online survey that also gathered geographic and socioeconomic information and included questions relating to the understanding of the reform principles.
Mueller, S., Lockshin, L. & Louviere, J.J. 2010, 'What you see may not be what you get: Asking consumers what matters may not reflect what they choose', Marketing Letters, vol. 21, no. 4, pp. 335-350.
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We compared a direct way to measure the relative importance of packaging and other extrinsic cues like brand name, origin, and price with the relative importance of these variables in an indirect discrete choice experiment. We used best´+¢worst scaling (BWS) with visual and verbal presentation of the attribute descriptions as a way to directly ask consumers about wine packaging relevance. Both direct methods gave low packaging importance scores contrary to anecdotal industry evidence and beliefs. BWS results indicated all visual extrinsic cues were less important than verbal cues, with small variance among respondents, suggesting strong agreement about non-importance. We compared those results with a multi-media-based discrete choice experiment (DCE) that varied label and packaging attributes to produce shelf-like choice scenarios. The DCE results revealed much higher impacts due to packaging-related attributes, as well as significant preference heterogeneity. Our results suggest considerable caution in using direct importance measures with visual packaging attributes
Burton, C.T., Louviere, J.J. & Young, L.C. 2009, 'Retaining the visitor, enhancing the experience: identifying attributes of choice in repeat museum visitation', International Journal of Nonprofit and Voluntary Sector Marketing, vol. 14, no. 1, pp. 21-34.
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How people make choices in relation to cultural and leisure consumption has been explored from the viewpoint of motivation, lifestyle segmentation, and lifecycle. Little is known about the specific characteristics associated with choices to visit, re-visit, or not to visit a museum. Understanding characteristics of choice, developing incentives, bundled packages, and levels of pricing is an essential element in marketing strategies for museums operating in a competitive leisure marketplace. However, determining what really matters to cultural consumers is complex and methodologies to assist in unraveling such complexities are not easily identified. This study aimed to address ways in which people respond to specific incentives as influences in choosing museum visitation. The study was conducted in two major museums in Australia to determine how useful choice modeling is in identifying features that matter to cultural consumers. The results suggest that choice modeling has much to offer in relation to understanding the benefits people are seeking from a museum experience as well as offering strategic insight into potential collaborative ventures and re-combinations of existing museum products and services.
Carson, R., Louviere, J.J. & Wasi, N. 2009, 'A cautionary note on designing discrete choice experiements: A comment on Lusk nad Norwood's "Effect of Experiment Deisgn on Choice-Based Conjoint Valuation Estimates"', American Journal of Agricultural Economics, vol. 91, no. 4, pp. 1056-1063.
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Recent Monte Carlo work on choosing experimental designs for discrete choice experiments seemed to greatly simplify this choice for applied researchers. It suggested that (a) commonly used designs can generate unbiased estimates for indirect utility function specifications with main effects only and main effects plus higher order terms, and (b) random designs are more efficient than main effects designs. We show that these results are very specific to the particular indirect utility specifications studied and do not generalize well. We further show that conclusions drawn concerning random designs are problematic and potentially dangerous for applied researchers.
Colombo, S., Hanley, N. & Louviere, J.J. 2009, 'Modeling preference heterogeneity in stated choice data: An analysis for public goods generated by agriculture', Agricultural Economics, vol. 40, no. 3, pp. 307-322.
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Stated choice models based on the random utility framework are becoming increasingly popular in the applied economics literature. The need to account for respondents' preference heterogeneity in such models has motivated researchers in agricultural, environmental, health, and transport economics to apply random parameter logit and latent class models. In most of the published literature these models incorporate heterogeneity in preferences through the systematic component of utility. An alternative approach is to investigate heterogeneity through the random component of utility, and covariance heterogeneity models are one means of doing this. In this article we compare these alternative ways of incorporating preference heterogeneity in stated choice models and evaluate the sensitivity of estimated welfare measures to which approach is selected. We find that a latent class approach fits our data best, but all the models perform well in terms of out-of-sample predictions. Finally, we discuss what criteria a researcher can use to decide which approach is most appropriate for a given data set.
Crouch, G.I., Devinney, T.M., Louviere, J.J. & Islam, T. 2009, 'Modelling consumer choice behaviour in space tourism', Tourism Management, vol. 30, no. 3, pp. 441-454.
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This paper presents the results of stated-preference, discrete choice experiments designed to examine potential consumer reactions to various options emerging in the embryonic space tourism industry. The research investigated choice behaviour between four types of space tourism: high-altitude jet fighter flights, atmospheric zero-gravity flights, short-duration sub-orbital flights, and longer duration orbital trips into space. Each type of space tourism was represented in terms of an array of major features that potentially may have a major impact on the perceptions, attitudes, and choice behaviour of likely customers in this market. The choice experiments were embedded in an information-rich, online survey. Choice data from the experiments were analysed with the mixed logit model, which is a random coefficient model that allows for a continuous distribution of the preferences (effects) for each feature. The results identify a number of features for each type of flight option as well as a number of customer characteristics that appear to impact the choice of space tourism type.
Louviere, J.J. & Lancsar, E. 2009, 'Choice experiments in health: the good, the bad, the ugly and toward a brighter future', Health Economics, Policy and Law, vol. 4, no. 4, pp. 527-546.
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Compared to many applied areas of economics, health economics has a strong tradition in eliciting and using stated preferences (SP) in policy analysis. Discrete choice experiments (DCEs) are one SP method increasingly used in this area. Literature on DCEs in health and more generally has grown rapidly since the mid-1990s. Applications of DCEs in health have come a long way, but to date few have been 'best practice', in part because 'best practice' has been somewhat of a moving target. The purpose of this paper is to briefly survey the history of DCEs and the state of current knowledge, identify and discuss knowledge gaps, and suggest potentially fruitful areas for future research to fill such gaps with the aim of moving the application of DCEs in health economics closer to best practice.
Adamowicz, W., Bunch, D.S., Cameron, T.A., Dellaert, B.G., Hanemann, W.M., Keane, M., Louviere, J.J., Meyer, R.J., Steenburgh, T. & Swait JR, J.D. 2008, 'Behavioral Frontiers in Choice Modeling', Marketing Letters, vol. 19, no. 3-4, pp. 215-228.
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We review the discussion at a workshop whose goal was to achieve a better integration among behavioral, economic, and statistical approaches to choice modeling. The workshop explored how current approaches to the specification, estimation, and application of choice models might be improved to better capture the diversity of processes that are postulated to explain how consumers make choices. Some specific challenges include how to capture and parsimoniously describe heterogeneous mixes of heuristic choice rules, methods for building realistic models of choice, and nontraditional methods for estimating models. An agenda for important future work in these areas is also proposed.
Auger, P., Devinney, T.M., Louviere, J.J. & Burke, P.F. 2008, 'Do social product features have value to consumers?', International Journal of Research in Marketing, vol. 25, no. 3, pp. 183-191.
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The present paper utilizes a random utility theoretic experimental design to provide estimates of the relative value that selected consumers place on the social features of products. Experiments were conducted in Hong Kong and Australia using both university students and supporters of the human rights organization Amnesty International. The paper focuses on two classes of social features, +labor practices+ and +animal rights and the environment+. The results show that the social features of products can, on average, affect an individuals' likelihood of purchasing a product. Also, this paper finds distinctive segments of ethically orientated consumers.
Coast, J., Flynn, T.N., Sutton, E., Al-Janabi, H., Vosper, A.J., Lavender, S., Louviere, J.J. & Peters, T.J. 2008, 'Investigating Choice Experiments for Preferences of Older People (ICEPOP): evaluative spaces in health economics', Journal of Health Services Research and Policy, vol. 13, no. Supp 3, pp. 31-37.
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This paper deals with three concerns about the evaluative framework that is currently dominant within health economics. These concerns are: that the evaluative framework is concerned entirely with health; that the evaluative framework has an individualistic focus on patients alone; and that the methods used to estimate `health+ within the current evaluative framework could be improved both in terms of the generation of descriptive systems and in using valuation methods that rely less on people's ability to express their preferences on a cardinal scale. In exploring these issues the Investigating Choice Experiments for Preferences of Older People (ICEPOP) programme has explicitly focused on both the topic of older people and the methods of discrete choice experiments. A capability index has been developed and attributes for an economic measure of end-of-life care are currently being generated, providing the possibility of extending the evaluative framework beyond health alone. A measure of carer's experience and a framework for extending measurement in end-of-life care to loved ones are both also in development, thus extending the evaluative framework beyond the patient alone. Rigorous qualitative methods employing an iterative approach have been developed for use in constructing attributes, and best+worst scaling has been utilized to reduce task complexity and provide insights into heterogeneity. There are a number of avenues for further research in all these areas, but in particular there is need for greater attention to be paid to the theory underlying the evaluative framework within health economics.
Coast, J., Flynn, T.N., Natarajan, L., Sproston, K., Lewis, J., Louviere, J.J. & Peters, T.J. 2008, 'Valuing the ICECAP Capability Index for Older People', Social Science & Medicine, vol. 67, no. 5, pp. 874-882.
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This paper reports the first application of the capabilities approach to the development and valuation of an instrument for use in the economic evaluation of health and social care interventions. The ICECAP index of capability for older people focuses on quality of life rather than health or other influences on quality of life, and is intended to be used in decision making across health and social care in the UK. The measure draws on previous qualitative work in which five conceptual attributes were developed: attachment, security, role, enjoyment and control. This paper details the innovative use within health economics of further iterative qualitative work in the UK among 19 informants to refine lay terminology for each of the attributes and levels of attributes used in the eventual index. For the first time within quality of life measurement for economic evaluation, a best-worst scaling exercise has been used to estimate general population values (albeit for the population of those aged 65+ years) for the levels of attributes, with values anchored at one for full capability and zero for no capability. Death was assumed to be a state in which there is no capability. The values obtained indicate that attachment is the attribute with greatest impact but all attributes contribute to the total estimation of capability. Values that were estimated are feasible for use in practical applications of the index to measure the impact of health and social care interventions.
Dolnicar, S., Crouch, G.I., Devinney, T.M., Huybers, T., Louviere, J.J. & Oppewal, H. 2008, 'Tourism and Discretionary Income Allocation: Heterogeneity Among Households', Tourism Management, vol. 29, no. 1, pp. 44-52.
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Tourism expenditures have been much researched in the past: at the aggregate level to evaluate national benefit of the tourism industry and at the disaggregate level to evaluate the attractiveness of tourist market segments. Past studies, however, fail to take into account that tourism expenditures are affected by the plethora of other expenditures households make and that households are heterogeneous in allocating discretionary funds to alternative spending options. The present study fills this gap by investigating heterogeneity in household discretionary expenditures derived from a realistic choice task. In doing so, it challenges the implicit paradigm of prior research into tourism expenditures in which the context of the household tradeoff in allocating income is ignored. The results, highlight the importance of studying tourism expenditure in the context of other household expenditure decisions; demonstrate the high level of heterogeneity between individuals with respect to their spending preferences; and illustrate the value of this knowledge for tourism destination management as well as government policy in being able to assess the competition between expenditure categories and identify market segments most suitable for the product category offered.
Flynn, T.N., Louviere, J.J., Peters, T.J. & Coast, J. 2008, 'Estimating Preferences For a Dermatology Consultation Using Best-Worst Scaling: Comparison of Various Methods of Analysis', BMC Medical Research Methodology, vol. 8, no. 76, pp. 1-12.
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Background Additional insights into patient preferences can be gained by supplementing discrete choice experiments with best-worst choice tasks. However, there are no empirical studies illustrating the relative advantages of the various methods of analysis within a random utility framework. Methods Multinomial and weighted least squares regression models were estimated for a discrete choice experiment. The discrete choice experiment incorporated a best-worst study and was conducted in a UK NHS dermatology context. Waiting time, expertise of doctor, convenience of attending and perceived thoroughness of care were varied across 16 hypothetical appointments. Sample level preferences were estimated for all models and differences between patient subgroups were investigated using covariate-adjusted multinomial logistic regression. Results A high level of agreement was observed between results from the paired model (which is theoretically consistent with the 'maxdiff' choice model) and the marginal model (which is only an approximation to it). Adjusting for covariates showed that patients who felt particularly affected by their skin condition during the previous week displayed extreme preference for short/no waiting time and were less concerned about other aspects of the appointment. Higher levels of educational attainment were associated with larger differences in utility between the levels of all attributes, although the attributes per se had the same impact upon choices as those with lower levels of attainment. The study also demonstrated the high levels of agreement between summary analyses using weighted least squares and estimates from multinomial models.
Flynn, T.N., Louviere, J.J., Marley, A.A., Coast, J. & Peters, T.J. 2008, 'Rescaling quality of life tariffs from discrete choice experiments for use as QALYs: a cautionary tale.', Population Health Metrics, vol. 6, no. 6, pp. 1-11.
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Background Researchers are increasingly investigating the potential for ordinal tasks such as ranking and discrete choice experiments to estimate QALY health state values. However, the assumptions of random utility theory, which underpin the statistical models used to provide these estimates, have received insufficient attention. In particular, the assumptions made about the decisions between living states and the death state are not satisfied, at least for some people. Estimated values are likely to be incorrectly anchored with respect to death (zero) in such circumstances. Methods Data from the Investigating Choice Experiments for the preferences of older people CAPability instrument (ICECAP) valuation exercise were analysed. The values (previously anchored to the worst possible state) were rescaled using an ordinal model proposed previously to estimate QALY-like values. Bootstrapping was conducted to vary artificially the proportion of people who conformed to the conventional random utility model underpinning the analyses.
Lancsar, E. & Louviere, J.J. 2008, 'Conducting Discrete Choice Experiments to Inform Healthcare Decision Making', Pharmacoeconomics, vol. 26, no. 8, pp. 661-677.
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Discrete choice experiments (DCEs) are regularly used in health economics to elicit preferences for healthcare products and programmes. There is growing recognition that DCEs can provide more than information on preferences and, in particular, they have the potential to contribute more directly to outcome measurement for use in economic evaluation. Almost uniquely, DCEs could potentially contribute to outcome measurement for use in both cost-benefit and cost-utility analysis. Within this expanding remit, our intention is to provide a resource for current practitioners as well as those considering undertaking a DCE, using DCE results in a policy/commercial context, or reviewing a DCE. We present the fundamental principles and theory underlying DCEs. To aid in undertaking and assessing the quality of DCEs, we discuss the process of carrying out a choice study and have developed a checklist covering conceptualizing the choice process, selecting attributes and levels, experimental design, questionnaire design, pilot testing, sampling and sample size, data collection, coding of data, econometric analysis, validity, interpretation and welfare and policy analysis.
Lee, J.A., Soutar, G.N. & Louviere, J.J. 2008, 'The Best-Worst Scaling Approach: An Alternative to Schwartz's Values Survey', Journal of Personality Assessment, vol. 90, no. 4, pp. 335-347.
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Traditional self-report ratings have some measurement problems that a relatively new method, best-worst scaling (BWS; Finn & Louviere, 1992), may overcome. This alternative method, based on Louviere's BWS, can be used to measure the relative importance or perceived trade-offs among choice alternatives. The method is illustrated as an alternative to the Schwartz Value Survey (SVS; Schwartz, 1992). In a series of samples, it was found that Schwartz values best-worst survey (SVBWS) reproduced Schwartz's (1992) theoretical value structure and supported hypothesized relationships between values and value-expressive behaviors, ethnocentrism, and environmental-related tourism activities. In addition, the SVBWS approach took significantly less respondent time than the traditional SVS approach.
Louviere, J.J. & Islam, T. 2008, 'A comparison of importance weights and willingness-to-pay measures derived from choice-based conjoint, constant sum scales and best-worst scaling', Journal of Business Research, vol. 61, no. 9, pp. 903-911.
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We review the measurement of product attribute importance, and find little consensus in definition or measurement methods. We compare four measurement methods: 1) two direct methods whereby respondents report the importance of attributes using best+worst scaling or constant sum scales, and 2) two indirect methods derived from discrete choice experiments. Our comparisons rely on previous findings that choice experiments are externally valid to use as the standard. We find high agreement within direct or indirect methods, but less agreement between direct and indirect methods. Our results also demonstrate that inferences derived from indirect measures appear to be susceptible to context effects related to the particular attributes a researcher chooses to investigate. We discuss implications for current and future research.
Louviere, J.J., Islam, T., Wasi, N., Street, D. & Burgess, L.B. 2008, 'Designing Discrete Choice Experiments: Do Optimal Designs Come At A Price?', Journal of Consumer Research, vol. 35, no. 2, pp. 360-375.
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In discrete choice experiments, design decisions are crucial for determining data quality and costs. While high statistical efficiency designs are desirable, they may come at a price if they increase the cognitive burden for respondents. We address this problem by designing 44 experiments that systematically vary numbers of attributes and attribute level differences. Our results for two product categories suggest that respondents systematically are less consistent in answering choice questions as statistical efficiency increases. This relationship holds regardless of the number of attributes and is statistically significant even if one accommodates preference heterogeneity. Implications for practice and future research are discussed.
Louviere, J.J., Street, D., Burgess, L.B., Wasi, N., Islam, T. & Marley, A.A. 2008, 'Modeling the choices of individual decision-makers by combining efficient choice experiment designs with extra preference information', Journal of Choice Modelling, vol. 1, no. 1, pp. 128-163.
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Marley, A.A., Flynn, T.N. & Louviere, J.J. 2008, 'Probabilistic Models of Set-Dependent and Attribute-Level Best-Worst Choice', Journal of Mathematical Psychology, vol. 52, no. 5, pp. 281-296.
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We characterize a class of probabilistic choice models where the choice probabilities depend on two scales, one with a value for each available option and the other with a value for the set of available options. Then, we develop similar results for a task in which a person is presented with a profile of attributes, each at a pre-specified level, and chooses the best or the best and the worst of those attribute-levels. The latter design is an important variant on previous designs using best+worst choice to elicit preference information, and there is various evidence that it yields reliable interpretable data. Nonetheless, the data from a single such task cannot yield separate measures of the +importance+ of an attribute and the +utility+ of an attribute-level. We discuss various empirical designs, involving more than one task of the above general type, that may allow such separation of importance and utility.
Auger, P., Devinney, T.M. & Louviere, J.J. 2007, 'Using best-worst scaling methodology to investigate consumer ethical beliefs across countries', Journal Of Business Ethics, vol. 70, no. 3, pp. 299-326.
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This study uses best-worst scaling experiments to examine differences across six countries in the attitudes of consumers towards social and ethical issues that included both product related issues (such as recycled packaging) and general social factors (
Buckley, P.J., Devinney, T.M. & Louviere, J.J. 2007, 'Do managers behave the way theory suggests? A choice-theoretic examination of foreign direct investment location decision-making', Journal of international business studies, vol. 38, no. 7, pp. 1069-1094.
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Crouch, G.I., Oppewal, H., Huybers, T., Dolnicar, S., Louviere, J.J. & Devinney, T.M. 2007, 'Discretionary Expenditure and Tourism Consumption: Insights from a Choice Experiment', Journal of Travel Research, vol. 45, no. 3, pp. 247-258.
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Flynn, T.N., Louviere, J.J., Peters, T.J. & Coast, J. 2007, 'Best-worst scaling: What it can do for health care research and how to do it', Journal Of Health Economics, vol. 26, no. 1, pp. 171-189.
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Statements like quality of care is more highly valued than waiting time can neither be supported nor refuted by comparisons of utility parameters from a traditional discrete choice experiment (DCE). Best-worst scaling can overcome this problem because it
Islam, T., Louviere, J.J. & Burke, P.F. 2007, 'Modeling the effects of including/excluding attributes in choice experiments on systematic and random components', International Journal of Research in Marketing, vol. 24, no. 4, pp. 289-300.
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This paper examines the impact of attribute presence/absence in choice experiments using covariance heterogeneity models and random coefficient models. Results show that attribute presence/absence impacts both mean utility (systematic components) and choice variability (random components). Biased mean effects can occur by not accounting for choice variability. Further, even if one accounts for choice variability, attribute effects can differ because of attribute presence/absence. Managers who use choice experiments to study product changes or new variants should be cautious about excluding potentially essential attributes. Although including more relevant attributes increases choice variability, it also reduces bias.
King, M.T., Hall, J.P., Lanscar, E., Fiebig, D.G., Hossain, I., Louviere, J.J., Reddel, H. & Jenkins, C.R. 2007, 'Patient preferences for managing asthma: results from a discrete choice experiment', Health Economics, vol. 16, no. 7, pp. 703-717.
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Effective control of asthma requires regular preventive medication. Poor medication adherence suggests that patient preferences for medications may differ from the concerns of the prescribing clinicians. This study investigated patient preferences for preventive medications across symptom control, daily activities, medication side-effects, convenience and costs, using a discrete choice experiment embedded in a randomized clinical trial involving patients with mild moderate persistent asthma. The present data were collected after patients had received 6 weeks treatment with one of two drugs. Three choice options were presented, to continue with the current drug, to change to an alternative, hypothetical drug, or to take no preventive medication. Analysis used random parameter multinomial logit. Most respondents chose to continue with their current drug in most choice situations but this tendency differed depending on which medication they had been allocated. Respondents valued their ability to participate in usual daily activities and sport, preferred minimal symptoms, and were less likely to choose drugs with side-effects. Cost was also significant, but other convenience attributes were not. Demographic characteristics did not improve the model fit. This study illustrates how discrete choice experiments may be embedded in a clinical trial to provide insights into patient preferences.
Lancsar, E., Louviere, J.J. & Flynn, T.N. 2007, 'Several methods to investigate relative attribute impact in stated preference experiments', Social Science & Medicine, vol. 64, no. 8, pp. 1738-1753.
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There is growing use of discrete choice experiments (DCEs) to investigate preferences for products and programs and for the attributes that make up such products and programs. However, a fundamental issue overlooked in the interpretation of many choice experiments is that attribute parameters estimated from DCE response data are confounded with the underlying subjective scale of the utilities, and strictly speaking cannot be interpreted as the relative weight or impact of the attributes, as is frequently done in the health economics literature. As such, relative attribute impact cannot be compared using attribute parameter size and significance. Instead, to investigate the relative impact of each attribute requires commensurable measurement units; that is, a common, comparable scale. We present and demonstrate empirically a menu of five methods that allow such comparisons: (1) partial log-likelihood analysis; (2) the marginal rate of substitution for non-linear models; (3) Hicksian welfare measures; (4) probability analysis; and (5) best worst attribute scaling. We discuss the advantages and disadvantages of each method and suggest circumstances in which each is appropriate.
Lancsar, E., Hall, J.P., King, M.T., Kenny, P.M., Louviere, J.J., Fiebig, D.G., Hossain, I., Thien, F.C., Reddel, H. & Jenkins, C.R. 2007, 'Using discrete choice experiments to investigate subject preferences for preventive asthma medication', Respirology, vol. 12, no. 1, pp. 127-136.
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Background and objective: Long-term adherence to inhaled corticosteroids is poor despite the crucial role of preventer medications in achieving good asthma outcomes. This study was undertaken to explore patient preferences in relation to their current inhaled corticosteroid medication, a hypothetical preventer or no medication. Methods: A discrete choice experiment was conducted in 57 adults with mild moderate asthma and airway hyper-responsiveness, who were using inhaled corticosteroid =500 Ág/day (beclomethasone equivalent). In the discrete choice experiment, subjects evaluated 16 hypothetical scenarios made up of 10 attributes that described the process and outcomes of taking asthma medication, with two to four levels for each attribute. For each scenario, subjects chose between the hypothetical medication, the medication they were currently taking and no asthma medication. A random parameter multinomial logit model was estimated to quantify subject preferences for the aspects of taking asthma medication and the influence of attributes on medication decisions. Results: Subjects consistently made choices in favour of being able to do strenuous and sporting activities with or without reliever, experiencing no side-effects and never having to monitor their peak flow. Frequency of collecting prescriptions, frequency of taking the medication, its route of administration and the strength of the doctor recommendation about the medication were not significant determinants of choice. Conclusions: The results of this study suggest that patients prefer a preventer that confers capacity to maximize physical activity, has no side-effects and does not require daily peak flow monitoring.
Lee, J.A., Soutar, G.N. & Louviere, J.J. 2007, 'Measuring values using best-worst scaling: The LOV example', Psychology & Marketing, vol. 24, no. 12, pp. 1043-1058.
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The paper discusses the way that values have been measured and suggests an alternative way to collect values data. A recently developed approach, termed Best Worst Scaling, developed by Louviere and his colleagues, offers an opportunity to collect such d
Wang, P.Z., Menictas, C. & Louviere, J.J. 2007, 'Comparing Structural Equation Models with Discrete Choice Experiments for Modelling Brand Equity and Predicting Brand Choices', Australasian Marketing Journal, vol. 15, no. 2, pp. 12-25.
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Brands play an important role in consumers' perception and choice of a product. Measuring brand equity has thus become a topic of growing interest among both practitioners and researchers in marketing. This paper examines the Erdem and Swait (1998) brand equity framework, which is one of the key consumer-based brand equity models developed in the brand literature. Specifically, it investigates the external validity of the Erdem-Swait framework using two alternative approaches: One is based on structural equation models (SEMs) and the other is based on discrete choice experiments (DCE). Four data sets pertaining to four different product categories were collected from the Australian financial services sector to compare the ability of expected utilities calculated from SEMs and DCEs to predict the actual brand choices of real consumers in real markets. Although both models performed well, results showed that the predictions of the DCE models were consistently better than those of the SEMs in all cases. These findings have implications for both academics and practitioners in brand evaluation and management.
Coast, J., Flynn, T.N., Salisbury, C., Louviere, J.J. & Peters, T.J. 2006, 'Maximising responses to discrete choice experiments: a randomised trial', Applied Health Economics and Health Policy, vol. 5, no. 4, pp. 249-260.
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To identify any differences in response and completion rates across two versions of a questionnaire, in order to determine the trade-off between a potentially higher response rate (from a short questionnaire) and a greater level of information from each respondent (from a long questionnaire). METHODS: This was a randomised trial to determine whether response rates and/or results differ between questionnaires containing different numbers of choices: a short version capable of estimating main effects only and a longer version capable of estimating two-way interactions, provided certain assumptions hold. Best-worst scaling was the form of discrete choice experimentation used. Data were collected by post and analysed in terms of response rates, completion rates and differences in mean utilities. RESULTS: Fifty-three percent of individuals approached agreed to take part. From these, the response to the long questionnaire was 83.2% and the short questionnaire was 85.1% (difference 1.9%, 95% CI -7.3, 11.2; p = 0.68). The two versions of the questionnaire provided similar inferences.
Hall, J.P., Fiebig, D.G., King, M.T., Hossain, I. & Louviere, J.J. 2006, 'What influences participation in genetic carrier testing? Results from a discrete choice experiment', Journal of Health Economics, vol. 25, no. 3, pp. 520-537.
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This study explores factors that influence participation in genetic testing programs and the acceptance of multiple tests. Tay Sachs and cystic fibrosis are both genetically determined recessive disorders with differing severity, treatment availability,
Lancsar, E. & Louviere, J.J. 2006, 'Deleting 'irrational' responses from discrete choice experiments: a case of investigating or imposing preferences?', Health Economics, vol. 15, no. 8, pp. 797-811.
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Investigation of the 'rationality' of responses to discrete choice experiments (DCEs) has been a theme of research in health economics. Responses have been deleted from DCEs where they have been deemed by researchers to (a) be 'irrational', defined by su
Louviere, J.J. 2006, 'What you don't know might hurt you: Some unresolved issues in the design and analysis of discrete choice experiments', Environmental and Resource Economics, vol. 34, no. 1, pp. 173-188.
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The papers and comments in this issue focus on four broad areas related to understanding and modeling choices: (1) The use of laboratory experiments to improve valuation methods; (2) The design of stated preference choice set and choice occasions; (3) La
Verma, R., Louviere, J.J. & Burke, P.F. 2006, 'Using a market-utility-based approach to designing public services: A case illustration from United States Forest Service', Journal Of Operations Management, vol. 24, no. 4, pp. 407-416.
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Government and public services have to not only enforce the requirements of the regulatory policies, but also have to satisfy the needs of preferences of their clients and customers. In this paper, we summarize the results of a multi-year case study cond
Louviere, J.J., Train, K., Ben-akiva, M., Bhat, C., Brownstone, D., Cameron, T.A., Carson, R., Deshazo, J.R., Fiebig, D.G., Greene, W., Hensher, D. & Waldman, D. 2005, 'Recent Progress on Endogeneity in Choice Modeling', Marketing Letters, vol. 16, no. 3-4, pp. 255-265.
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We describe recent progress in several areas related to endogeneity, including: choice set formation and attention to attributes; interactions among decision-makers; respondents+ strategic behavior in answering stated preference choices; models of multiple discrete/continuous choice; distributions of willingness-to-pay; and methods for handling traditionally endogenous explanatory variables.
Marley, A.A. & Louviere, J.J. 2005, 'Some probabilistic models of best, worst, and best-worst choices', Journal of Mathematical Psychology, vol. 49, no. 6, pp. 464-480.
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Over the past decade or so, a choice design in which a person is asked to select both the best and the worst option in an available set of options has been gaining favor over more traditional designs, such as where the person is asked, for instance, to: select the best option; select the worst option; rank the options; or rate the options. In this paper, we develop theoretical results for three overlapping classes of probabilistic models for best, worst, and best+worst choices, with the models in each class proposing specific ways in which such choices might be related. The models in these three classes are called random ranking and random utility, joint and sequential, and ratio scale. We include some models that belong to more than one class, with the best known being the maximum-difference (maxdiff) model, summarize estimation issues related to the models, and formulate a number of open theoretical problems.
Street, D., Burgess, L.B. & Louviere, J.J. 2005, 'Quick and easy choice sets: Constructing optimal and nearly optimal stated choice experiments', International Journal of Research in Marketing, vol. 22, no. 4, pp. 459-470.
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In this paper we compare a number of common strategies for constructing discrete choice experiments. Two of the strategies, including one based on theoretical constructions for optimal discrete choice experiments, produce designs that are better than those that come about from random grouping and from using the LMA construction. A simple account of this theoretical construction is given
Viney, R.C., Savage, E.J. & Louviere, J.J. 2005, 'Empirical investigation of experimental design properties of discrete choice experiments in health care', Health Economics, vol. 14, no. 4, pp. 349-362.
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Experimental design is critical to valid inference from the results of discrete choice experiments (DCEs). In health economics, DCEs have placed limited emphasis on experimental design, typically employing relatively small fractional factorial designs, w
Crouch, G.I. & Louviere, J.J. 2004, 'The determinants of convention site selection: a logistic choice model from experimental data', Journal of Travel Research, vol. 43, no. 2, pp. 118-130.
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Auger, P., Burke, P.F., Devinney, T.M. & Louviere, J.J. 2003, 'What will consumers pay for social product features?', Journal Of Business Ethics, vol. 42, no. 3, pp. 281-304.
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Gerard, K., Shanahan, M. & Louviere, J.J. 2003, 'Using stated preference discrete choice modelling to inform health care decision-making: a pilot study of breast screening participation', Applied Economics, vol. 35, no. 9, pp. 1073-1085.
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Blamey, R., Bennett, J.W., Louviere, J.J., Morrison, M.D. & Rolfe, J.C. 2002, 'Attribute causality in environmental choice modelling', Environmental and Resource Economics, vol. 23, no. 2, pp. 167-186.
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Erdem, T., Swait JR, J.D. & Louviere, J.J. 2002, 'The impact of brand credibility on consumer price sensitivity', International Journal of Research in Marketing, vol. 19, no. 1, pp. 1-19.
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Hall, J.P., Kenny, P.M., King, M.T., Louviere, J.J., Viney, R.C. & Yeoh, A. 2002, 'Using stated preference discrete choice modelling to evaluate the introduction of varicella vaccination', Health Economics, vol. 11, no. 5, pp. 457-465.
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Applications of stated preference discrete choice modelling (SPDCM) in health economics have been used to estimate consumer willingness to pay and to broaden the range of consequences considered in economic evaluation. This paper demonstrates how SPDCM can be used to predict participation rates, using the case of varicella (chickenpox) vaccination. Varicella vaccination may be cost effective compared to other public health programs, but this conclusion is sensitive to the proportion of the target population immunised. A choice experiment was conducted on a sample of Australian parents to predict uptake across a range of hypothetical programs. Immunisation rates would be increased by providing immunisation at no cost, by requiring it for school entry, by increasing immunisation rates in the community and decreasing the incidence of mild and severe side effects. There were two significant interactions; price modified the effect of both support from authorities and severe side effects. Country of birth was the only significant demographic characteristic. Depending on aspects of the immunisation program, the immunisation rates of children with Australian-born parents varied from 9% to 99% while for the children with parents born outside Australia they varied from 40% to 99%. This demonstrates how SPDCM can be used to understand the levels of attributes that will induce a change in the decision to immunise, the modification of the effect of one attribute by another, and subgroups in the population. Such insights can contribute to the optimal design and targeting of health programs.
Louviere, J.J., Street, D., Carson, R., Ainslie, A., Deshazo, J.R., Cameron, T.A., Hensher, D., Kohn, R. & Marley, A.A. 2002, 'Dissecting the random component of utility', Marketing Letters, vol. 13, no. 3, pp. 177-193.
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Morrison, M.D., Bennett, J.W., Blamey, R. & Louviere, J.J. 2002, 'Choice modelling and tests of benefit transfer', The Australian Journal of Agricultural and Resource Economics, vol. 23, pp. 161-170.
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Rolfe, J.C., Bennett, J.W. & Louviere, J.J. 2002, 'Stated values and reminders of substitute goods: Testing for framing effects with choice modelling', Australian Journal of Agriculture and Resource Economics, vol. 46, no. 1, pp. 1-20.
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Choice modelling, a non-market valuation technique, is used to explore framing issues in the context of environmental valuations. Choice modelling appears to have promise in simultaneously valuing a pool of substitute amenities and goods. Describing choices according to component attributes can also help to frame choices according to a number of trade-offs. The statistical information available helps to determine where framing effects have occurred. Three choice modelling experiments were reviewed to show that framing effects may be more widespread in non-market valuation studies than is commonly thought.
Verma, R., Plaschka, G. & Louviere, J.J. 2002, 'Understanding customer choices: a key to successful management of hospitality services', Cornell Hotel and Restaurant Administration Quarterly, vol. 43, no. 6, pp. 15-24.
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Viney, R.C., Lancsar, E. & Louviere, J.J. 2002, 'Discrete choice experiments to measure consumer preferences for health and healthcare', Pharmaeconomics Outcomes Research: Expert Review, vol. 2, no. 4, pp. 319-326.
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Hensher, D., Stopher, P.R. & Louviere, J.J. 2001, 'An Exploratory Analysis of the Effect of Numbers of Choice Sets in Designed Choice Experiments: an Airline Choice Application', Journal of Air Transport Management, vol. 7, pp. 373-379.
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Stated choice (SC) experiments are increasingly adopted as the empirical source of information on how individuals respond to current and potential travel contexts. The accumulated experience with SC data has been heavily conditioned on analyst prejudices about the acceptable complexity of the data collection instrument, especially the number of profiles (or treatments) given to each sampled individual (and the number of attributes and alternatives to be processed). It is not uncommon for analysts to impose very stringent limitations on the complexity of an SC experiment. A review of the literature suggests that very little is known about the basis for rejecting complex designs or accepting simple designs. In this paper, we develop a complex design as the basis for an SC study, producing a fractional factorial of 32 rows. However, we then truncate the fraction by administering 4, 8, 16, 24 and 32 profiles to a sample of individuals in Australia and New Zealand faced with the decision to fly (or not to fly) between Australia and New Zealand by alternative airlines and fare regimes. Statistical comparisons of elasticities (an appropriate behavioural basis for comparisons) suggest that the empirical gains within the context of a linear specification of the utility expression associated with each alternative in a discrete choice model may be quite marginal.
Jans, N., Frazer-Jans, J. & Louviere, J.J. 2001, 'Employee Choice Modelling: Predicting Employee Behaviour Under Varied Employment Conditions', Asia Pacific Journal of Human Resources, vol. 39, no. 3, pp. 59-81.
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Louviere, J.J. 2001, 'What if consumer experiments impact variances as well as means? Response variability as a behavioral phenomenon', Journal of Consumer Research, vol. 28, no. 3, pp. 506-511.
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This essay discusses the fact that in many cases means and variances of probability distributions are confounded and cannot be separated, which poses particular problems for analysis and interpretation of behavioral response data in consumer research. The discussion focuses on random utility theory to show that the confoundment of means and variances poses problems for published research in many areas of consumer behavior. Examples are provided to show why and how reported empirical differences in means may in fact be differences in variability. Ways to deal with the problem empirically are discussed.
Severin, V., Louviere, J.J. & Finn, A. 2001, 'The Stability of Retail Shopping Choices Over Time and Across Countries', The Journal of Retailing, vol. 77, no. 2, pp. 185-202.
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The aggressive, geographic market expansion of successful retail organizations, the development of a global consumer market and the spatial diffusion of retail innovations led us to investigate the extent to which models helping managers to make strategic decisions can be generalized across time and place. To the extent that such generalization can occur, it would reduce the redundancy of research and associated costs for making decisions in major retail organizations. This article makes use of relatively recent developments in random utility theory to assess the stability over time and space of the preferences underlying retail-shopping choice. Data collected three times over four years in Canada are used to compare models of shopping center choice based on perceived center attributes. We hypothesize that random component variance differences are the likely source of observed differences in retailing preferences. Two waves of panel data for supermarket choice are used to assess our ability to generalize to another choice process. Data for shopping center choice collected in Canada, U.S.A., and Norway are used to assess spatial stability. The test results support the hypothesis for the spatial consistency of preferences. The test of stability over time shows no difference at all in retailing preferences, both the random component variances and the coefficients were unchanged over the four-year period studied.
Verma, R., Thompson, G.M., Moore, W.L. & Louviere, J.J. 2001, 'Effective Design of Products/Services: An Approach Based on Integration of Marketing and Operations Management Decisions', Decision Sciences, vol. 32, no. 1, pp. 165-193.
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This paper presents an integrated framework for designing profit-maximizing products/services, which can also be produced at reasonable operating difficulty levels. Operating difficulty is represented as a function of product and process attributes, and measures a firm's relative ease or difficulty in meeting customer demand patterns under specified operating conditions. Earlier optimum product design procedures have not considered operational difficulty. We show that optimum profit, market share, cost, and product profiles are dependent on operating difficulty level. Empirical results from the pizza delivery industry demonstrate the value of the proposed Effective Product/Service Design approach
Refereed conference papers
Khushaba, R.N., Kodagoda, S., Dissanayake, G., Greenacre, L.M., Burke, S. & Louviere, J.J. 2012, 'A neuroscientific approach to choice modeling: electroencephalogram (EEG) and user preferences', The 2012 International Joint Conference on Neural Networks, Brisbane, Australia, June 2012 in Proceedings of the 2012 International Joint Conference on Neural Networks, ed (anon), IEEE, Brisbane, Australia.
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Paper available at: http://ieeexplore.ieee.org/xpl/articleDetails.jsp?tp=&arnumber=6252561&contentType=Conference+Publications&sortType%3Ddesc_p_Publication_Year%26queryText%3Dkhushaba
Eckert, C., Frischknecht, B.D. & Louviere, J.J. 2010, 'Keep it simple: Easy ways to estimate choice models for single consumers', Australian and New Zealand Marketing Academy Conference, Christchurch, New Zealand, November 2010 in Proceedings of the Australian and New Zealand Marketing Academy Conference 2010, ed Ballantine, P; Finsterwalder, J, University of Canterbury, Christchurch, New Zealand, pp. 1-7.
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We show with Monte-Carlo simulations and empirical choice data sets that we can quickly and simply refine choice model estimates for individuals based on methods such as ordinary least squares regression and weighted least squares regression to produce well-behaved insample and out-of-sample predictions of choices. We use well-known regression methods to estimate choice models, which should allow many more researchers to estimate choice models and be confident that they are unlikely to make serious mistakes.
Kwak, K., Wang, P.Z. & Louviere, J.J. 2010, 'Detecting attribute by covariate interactions in discrete choice model', Australian and New Zealand Marketing Academy Conference, Christchurch, New Zealand, November 2010 in Proceedings of the Australian and New Zealand Marketing Academy Conference 2010, ed Ballantine, P; Finsterwalder, J, University of Canterbury, Christchurch, New Zealand, pp. 1-7.
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This paper introduces a simple way to identify attribute by covariate interactions in discrete choice models. This is important because modelling such interactions is an effective way to account for systematic taste variation or preference heterogeneity across different consumers. Using a simulated data set to mimic a well-known phenomenon of selective attention to design attributes, we tested our proposed approach in the banking service context. Our proposed approach was successful in detecting the attribute by covariate interactions implied by the data generation process and was found to outperform both full and stepwise interaction models. Such findings have implications for both academics and practitioners of the marketing research community in general and choice modelling field in particular.
Menictas, C., Wang, P.Z. & Louviere, J.J. 2010, 'Assessing the validity of brand equity constructs: A comparison of two approaches', Australian and New Zealand Marketing Academy Conference, Christchurch, New Zealand, November 2010 in Proceedings of the Australian and New Zealand Marketing Academy Conference 2010, ed Ballantine, P; Finsterwalder, J, University of Canterbury, Christchurch, New Zealand, pp. 1-8.
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This paper tests both the internal and external validity of the Erdem and Swait (1998) brand equity framework using two measurement modelling approaches, namely the relatively new Best-Worst Scaling (BWS) method (Finn and Louviere, 1992; Marley and Louviere, 2005) and the more traditional Confirmatory Factor Analysis (CFA) method. Data were collected from the Australian banking services sector. We find the measurement models derived from BWS outperformed the models based on CFA of the rating data in predicting both stated and real brand choices. The findings have implications for both academics and practitioners in brand equity measurement and management.
Auger, P., Devinney, T.M. & Louviere, J.J. 2009, 'Global strategies for social product consumption: Identifying the socially-conscious consumer', Australian and New Zealand Academy of Management Conference, Melbourne, Australia, December 2009 in 23rd ANZAM Conference 2009 'Sustainability Management and Marketing', ed Beaumont, N, Australian and New Zealand Academy of Management, Melbourne, Australia, pp. 1-22.
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This paper provides and overview of a multiple country examination of consumers+ willingness to pay for social product features. Using latent class finite mixture modeling we show that segments of socially conscious consumers exist but they possess characteristics at odds with traditional thinking.
Burke, P.F., Auger, P., Devinney, T.M. & Louviere, J.J. 2008, 'Evaluating the valuation of ethical features', International Centre for Anti Consumption Research, Faculty of Economics and Business, The University of Sydney, December 2008 in International Centre for Anti Consumption Research (ICAR) Conference, ed Black, I, Faculty of Economics and Business, The University of Sydney, Sydney, Australia, pp. 1-8.
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Hoek, J., Gendall, P. & Louviere, J.J. 2008, 'Plain Packaging, Pictorial Warnings and Tobacco Products: An Empirical Assessment', Australian and New Zealand Marketing Academy Conference, Sydney, Australia, December 2008 in Australia and New Zealand Marketing Academy Conference 2008: Marketing: Shifting the Focus from Mainstream to Offbeat, ed Spanjaard, D., Denize, S., Sharma, N., ANZMAC, Sydney, Australia, pp. 1-8.
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Although tobacco marketing is restricted, tobacco product packaging continues to communicate brand imagery, thereby maintaining brand salience and potentially reducing the impact of health warnings. This study used respondent conditioning theory to predict how disruption of brand imagery would affect the attractiveness of known, unknown and generic tobacco packages. A best-worst study found that familiar branding offset the negative connotations created by a pictorial warning label (PWL). These are the first findings to document the combined effect of PWLs and plain packaging; they suggest generic packs will stimulate cessation attempts and deter smoking initiation.
Hoek, J., Gendall, P. & Louviere, J.J. 2008, 'Risks, Benefits and DTC - An Analysis of Information Formats', Australian and New Zealand Marketing Academy Conference, Sydney, Australia, December 2008 in Australia and New Zealand Marketing Academy Conference 2008: Marketing: Shifting the Focus from Mainstream to Offbeat, ed Spanjaard, D., Denize, S., Sharma, N., ANZMAC, Sydney, Australia, pp. 1-8.
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Critics of direct to consumer prescription medicine advertising (DTC) claim it is unbalanced because benefit information features more prominently than risk information, and that it thus fails to meet the high standards of social responsibility called for in regulatory codes. We used respondent conditioning theory to examine whether variations in risk information format could improve recall of benefits, side effects and contra-indications in print DTC advertisements. A best-worst study confirmed striking differences in preference for varied information formats, while a second study found that visual heuristics increased recall of both risk and benefit information. The findings question marketers+ reluctance to provide easily accessible risk information and suggest prominent drug information panels may discharge manufacturers+ social responsibilities while simultaneously improving the effectiveness of their promotions.
Auger, P., Devinney, T.M. & Louviere, J.J. 2007, 'A multi-country investigation of the impact of intangible social attributes on purchase intentions', Engineering Mathematics and Applications Conference, Reykjavik, Iceland, May 2007 in Flexible Marketing in and Unpredictable World: Proceedings of the 36th EMAC Conference, ed Engilbertsson, H., Reykjavik University, Reykjavik, Iceland, pp. 1-7.
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the emergence of global media and information availability has increased the importance of intangible attributes in consumer purchase decisions. The present paper utilizes choice experiments to examine the relative importance of three categories of intangible attributes brand, country-of-origin, and social attributes on a sample of consumers from 6 countries.
Burke, P.F., Burton, C.T., Wise, C., Louviere, J.J. & Huybers, T. 2007, 'Museum Visitors Care about Everything! Using Best-Worst Scaling for Strategic Focus', Australian and New Zealand Marketing Academy Conference, Dunedin, New Zealand, December 2007 in Proceedings of the 2007 ANZMAC Conference 3Rs: Reputation, Responsibility and Relevance, ed Thyne, M.; Deans, K.; Gnoth, J., Otago University, Dunedin, New Zealand, pp. 459-467.
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Museums face similar challenges to those encountered by managers of fast-moving consumer goods. For instance, both must determine what things (factors) attract consumers (visitors) to their products (museums). Several methodologies have been applied in this area to find out what matters to visitors. In general, these methods produce lengthy lists and do not discriminate between items in terms of relative positioning. In this paper, we explore the use of best-worst scaling (BWS) to reduce and to quantify factors in their order of impact or importance. BWS is simple to use, producing results that are easy to communicate to nontechnical audiences, fostering links between research and actionable implications. We use an example with museum visitors to provide insights into the applicability of this technique to the arts sector, its limitations and areas for further research.
Lee, J.A., Soutar, G.N., Daly, T.M., Kelley, J.B. & Louviere, J.J. 2007, 'Schwartz Values Clusters and Tourists' Activities', Australian and New Zealand Marketing Academy Conference, Otago, New Zealand, December 2007 in Proceedings of the 2007 ANZMAC Conference 3Rs: Reputation, Responsibility and Relevance, ed Thyne, M.; Deans, K.; Gnoth, J., Otago University, Otago, New Zealand, pp. 102-108.
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Values have been related to tourist activities, producing contrasting results in different studies. This study helps to clarify the relationship between value patterns or segments and tourist activities using two different approaches to measuring Schwartz s (1992) values: the traditional rating scales and best-worst scaling approaches. The two measures suggested very similar four-cluster solutions that reflected Schwartz s higher order value dimensions. Further, the differences in the segments tourist related activities were sensible, suggesting people s holiday activities were influenced by their values and that tourism operators may benefit from taking values into account when considering target segments and appropriate marketing strategy and tactics.
Mueller, S., Lockshin, L., Louviere, J.J. & Hackman, D. 2007, 'Do Respondents use Extra Information Provided in Online Best-Worst Choice Experiments?', Australian and New Zealand Marketing Academy Conference, Otago, New Zealand, December 2007 in Proceedings of the 2007 ANZMAC Conference 3Rs: Reputation, Responsibility and Relevance, ed Thyne, M.; Deans, K.; Gnoth, J., Otago University, Otago, New Zealand, pp. 3486-3493.
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An issue of interest to researchers is the amount of explanatory information one needs to give respondents making decisions in choice tasks. One way to resolve this issue is to let people select only relevant information from interactive information sources. This resolution poses unanswered questions: e.g., will respondents use the extra information, and potential systematic differences in information users and non-users. To shed some light on this issue, we let respondents access optional descriptive information about attributes in the form of partial (verbal) and full (verbal plus visual) glossaries associated with a Best-Worst (BW) web survey. Only a small minority with higher subjective product knowledge accessed the glossary information. We found no significant difference between verbal and visual information in attractiveness of use or impact on choice.
Wang, P.Z., Menictas, C. & Louviere, J.J. 2007, 'Testing the Erdem and Swait Brand Equity Framework Using Latent Class Structural Equation Modelling', Australian and New Zealand Marketing Academy Conference, Dunedin, New Zealand, December 2007 in Proceedings of Australian and New Zealand Marketing Academy 2007, ed Thyne, M.; Deans, K.; Gnoth, J., Australian and New Zealand Marketing Academy, Dunedin, New Zealand, pp. 1819-1825.
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This paper tests the Erdem and Swait (1998) brand equity framework using latent class structural equation modelling. While there are a number of conceptual and measurement models of brand equity in the literature, we focus on the Erdem and Swait brand equity framework because it is based on formal theory in information economics. The Erdem and Swait framework was originally tested in a structural equation modelling framework without taking into account consumer preference heterogeneity. In this study, we extend the Erdem and Swait framework to incorporate preference heterogeneity via the use of latent class structural equation modelling. Data were collected from the financial services sector and results show two distinct segments of brand equity. The findings have implications for both academics and practitioners in brand management.
Lee, J.A., Soutar, G.N., Louviere, J.J. & Daly, T.M. 2006, 'An examination of the relationship between values and holiday benefits across cultures using rating scales and best-worst scaling', Australian and New Zealand Marketing Academy Conference, Brisbane, Australia, December 2006 in Advancing Theory, Maintaining Relevance - Proceedings of the 2006 ANZMAC Conference, ed Ali, Y; van Dessel, M, ANZMAC, Brisbane, Australia, pp. 1-8.
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Louviere, J.J. & Eagle, T. 2006, 'Confound it! That pesky little scale constant messes up our convenient assumptions', Sawtooth Software Conference, Florida, USA, March 2006 in Proceedings of the Sawtooth Software Conference 2006, ed -, Sawtooth Software Inc, Sequim, USA, pp. 211-228.
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Mathies, C., Louviere, J.J. & Gudergan, S. 2006, 'Yield management and recognition programs - how do they influence travellers' choices?', European Marketing Academy Conference, Athens, Greece, May 2006 in Sustainable Marketing Leadership: a synthesis of polymorphous axioms, strategies and tactics - Proceedings of the 35th EMAC Conference, ed Avlonitis, G J; Papavassiliou, N; Papastathopoulou, P, European Marketing Academy, Athens, Greece, pp. 1-8.
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Crouch, G.I., Devinney, T.M., Dolnicar, S., Huybers, T., Louviere, J.J. & Oppewal, H. 2005, 'New horses for old courses - questioning the limitations of sustainable tourism to supply-driven measures and the nature-based context', Australian and New Zealand Marketing Academy Conference, Fremantle, Australia, December 2005 in Broadening the Boundaries - ANZMAC 2005 Conference Proceedings, ed Purchase, S, University of Western Australia, Perth, Australia, pp. 13-19.
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Crouch, G.I., Devinney, T.M., Dolnicar, S., Huybers, T., Louviere, J.J. & Oppewal, H. 2005, 'Tourism discretionary spending choice behaviour', Australian and New Zealand Marketing Academy Conference, Fremantle, Australia, December 2005 in Broadening the Boundaries - ANZMAC 2005 Conference Proceedings, ed Purchase, S, University of Western Australia, Perth, Australia, pp. 7-12.
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Auger, P., Burke, P.F., Devinney, T.M. & Louviere, J.J. 2004, 'Consumer reaction to social issues: a six country study.', Engineering Mathematics and Applications Conference, Murcia, Spain, May 2004 in Proceedings of the 33rd EMAC Conference: +Worldwide Marketing?+, ed -, University of Murcia, Murcia, Spain, pp. 1-5.
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Bateman, I.J., Day, B.H., Dupont, D.P., Georgiou, S., Louviere, J.J., Morimoto, S. & Wang, P.Z. 2004, 'Preference formation in choice experiments (CE): task awareness and learning in the cognitive process.', Annual Conference of the European Association of Environmental and Resource Economics, Budapest, Hungary, June 2004 in 13th Annual Conference of the European Association of Environmental and Resource Economics, ed -, Budapest University of Economic Sciences and Public Administration, Budapest, pp. 1-21.
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Burton, C.T., Louviere, J.J. & Young, L.C. 2004, 'Choosing museums: the application of discrete choice modelling in predicting increased visitor frequency.', British Academy of Management Conference, St. Andrew, UK, August 2004 in Proceedings of the British Academy of Management Conference 2004, ed -, British Academy of Management, St. Andrew, UK, pp. 1-16.
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Devinney, T.M., Louviere, J.J. & Coltman, T. 2004, 'Utilizing rich multimedia methods for the elicitation of preferences for radical future technologies', Engineering Mathematics and Applications Conference, Warsaw, Poland, October 2004 in Proceedings of the ESOMAR/EMAC Conference: Integrating Marketing Research in Business. From Managing Data to Generating Decisions, ed Feunekes, G., ESOMAR, Asterdam, The Netherlands, pp. 271-288.
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Louviere, J.J. & Islam, T. 2004, 'To include or exclude attributes in choice experiments: a systematic investigation of the empirical consequences', Australian and New Zealand Marketing Academy Conference, Wellington, New Zealand, November 2004 in Conference Proceedings of the 2004 Australian and New Zealand Marketing Academy Conference: "Marketing Accountabilities and Responsibilities", ed Wiley, J; Thirkell, P, ANZMAC, Wellington, pp. 1-5.
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Oppewal, H., Morrison, M.D., Rungie, C., Waller, D.S., Wang, P.Z., Louviere, J.J. & Devinney, T.M. 2004, 'A conceptual model of consumer decision states using information acceleration.', Australian and New Zealand Marketing Academy Conference, Wellington, New Zealand, November 2004 in Conference Proceedings of the 2004 Australian and New Zealand Marketing Academy Conference: "Marketing Accountabilities and Responsibilities", ed Wiley, J; Thirkell, P, ANZMAC, Wellington, New Zealand, pp. 1-5.
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Owen, K.M. & Louviere, J.J. 2004, 'Consumer choice of genetically modified products: the effect of media content.', Australian and New Zealand Marketing Academy Conference, Wellington, New Zealand, November 2004 in Conference Proceedings of the 2004 Australian and New Zealand Marketing Academy Conference: "Marketing Accountabilities and Responsibilities", ed Wiley, J; Thirkell, P, ANZMAC, Wellington, pp. 1-8.
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Pihlens, D. & Louviere, J.J. 2004, 'How inconsistency in choice behaviour affects the magnitude of parameter estimates obtained in discrete choice models', Australian and New Zealand Marketing Academy Conference, Wellington, New Zealand, November 2004 in Conference Proceedings of the 2004 Australian and New Zealand Marketing Academy Conference: "Marketing Accountabilities and Responsibilities", ed Wiley, J; Thirkell, P, ANZMAC, Wellington, pp. 1-6.
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Rungie, C., Morrison, M.D., Waller, D.S., Wang, P.Z., Louviere, J.J., Oppewal, H., Devinney, T.M. & Coltman, T. 2004, 'Decision states and information acceleration', Australian and New Zealand Marketing Academy Conference, Wellington, New Zealand, November 2004 in Conference Proceedings of the 2004 Australian and New Zealand Marketing Academy Conference: "Marketing Accountabilities and Responsibilities", ed Wiley, J; Thirkell, P, ANZMAC, Wellington, New Zealand, pp. 1-5.
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Waller, D.S., Wang, P.Z., Oppewal, H., Morrison, M.D., Rungie, C., Louviere, J.J. & Devinney, T.M. 2004, 'Decision states for purchasing a DVD player: a preliminary study', Australian and New Zealand Marketing Academy Conference, Wellington, New Zealand, November 2004 in Conference Proceedings of the 2004 Australian and New Zealand Marketing Academy Conference: "Marketing Accountabilities and Responsibilities", ed Wiley, J; Thirkell, P, ANZMAC, Wellington, pp. 1-5.
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Wise, C. & Louviere, J.J. 2004, 'The impact of varying amounts of more and less salient product information upon consumer willingness to pay.', Australian and New Zealand Marketing Academy Conference, Wellington, New Zealand, November 2004 in Conference Proceedings of the 2004 Australian and New Zealand Marketing Academy Conference: "Marketing Accountabilities and Responsibilities", ed Wiley, J; Thirkell, P, ANZMAC, Wellington, pp. 1-6.
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Crouch, G.I. & Louviere, J.J. 2003, 'Place marketing buyer behaviour: a model of Australian convention sites', Australian and New Zealand Marketing Academy Conference, Adelaide, Australia, December 2003 in A Celebration of Ehrenberg and Bass: Marketing Knowledge, Discoveries and Contribution, ed Kennedy, R, ANZMAC, Adelaide, Australia, pp. 287-292.
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Li, S., Wang, P.Z., Louviere, J.J. & Carson, R. 2003, 'Archetypal analysis: a new way to segment markets based on extreme individuals', Australian and New Zealand Marketing Academy Conference, Adelaide, Australia, December 2003 in A Celebration of Ehrenberg and Bass: Marketing Knowledge, Discoveries and Contribution, ed Kennedy, R, ANZMAC, Adelaide, Australia, pp. 1674-1679.
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Louviere, J.J., Waller, D.S. & Smith, M. 2003, 'Modelling a hierarchy of consumer decision states: the choice of island holiday destinations and dvd players', Australian and New Zealand Marketing Academy Conference, Adelaide, Australia, December 2003 in A Celebration of Ehrenberg and Bass: Marketing Knowledge, Discoveries and Contribution, ed Kennedy, R, ANZMAC, Adelaide, Australia, pp. 554-559.
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Reports
Schuck, S.R., Aubusson, P.J., Buchanan, J.D., Louviere, J.J., Burke, P.F. & Prescott, A.E. 2012, 'Retaining effective early career teachers in NSW schools', UTS: CRLC and CENSOC, Sydney, pp. 1-193.
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This project was commissioned by the NSW Department of Education and Training. This four and a half year research project had the aims of tracking a cohort of final year (2005) preservice teacher education students through their post-graduation experience into 2006, 2007, 2008 and 2009, in order to understand more clearly the reasons why some early career teachers (ECTs) in NSW public schools choose to leave the profession, and why others choose to remain; and in order to develop strategies to increase the retention rate of effective teachers during their early years of teaching.

