Quantitative analysis methods and applications

Technical Writing

Quantitative Analysis

In the article Are Consumers Rational? Experimental Evidence? (2006), Shugan looks at the topic of consumer behavior. The purpose of this study was to see how marketing activities influence consumer buying behavior by looking at different models that have been developed to see which was is best at predicting consumer behavior. The overarching research question being looked at what whether consumers rational when they make buying decisions? Most Marketing Science models focus on the amount of total variance explained by the model. Analytical models focus on whether qualitative outcomes are explained or occur when predicted to. Statistical models focus on whether quantitative outcome variance is explained like the difference between observed and predicted outcomes. Normative models, calibrated from past data, focus on whether the models manufacture the best strategies. In each case, the question asked is whether the model makes a sufficiently accurate prediction to differentiate among probable marketing strategies.

The researcher's hypothesis in this study was that if the model accurately predicted cconsumer behavior as a function of the relevant variables in the situation of interest, that it could be said that consumers are rational, at least in that situation, and that the model accurately represents that rationality. This study done using an experimental research design in order to test how known explanatory variables affected consumer behavior.

Experimental controls test rationality based on whether earlier absent variables show notable explanatory power holding known explanatory variables constant. This was the procedure used when the independent variables of known explanatory variables which are nominal were tested to see how they affected the dependent variable of consumer behavior which is ordinal in nature.

The researcher partially assessed the validity of the theory or model by predicting different observations, either qualitative or quantitative. In some cases, the researcher randomly defined explained observations like being based on a point in time in the dataset, or based on previous research at the time of submission. However, this distinction was found to be less relevant in the present situation.

There was no statistical software identified as being used in this study, nor was there any discussion of what consent procedures were used. The conclusion drawn from this study was that consumer behavior appears to be more rational as researchers are better able to predict this behavior in more situations. Perfect rationality results when either consumer behavior is sufficiently predictable or when it can be predicted from important outcomes influenced by consumer behavior. Thus consumers are becoming more rational as new models more precisely predict consumer choice in more situations. However, some interesting experimental consumer behavior research finds the opposite. This research showed that existing models fail to consider critical variables that can explain significant inconsistency in behavior.

The illusion of conflict can be resolved by understanding the difference between experimental and statistical controls. This difference explains the obvious and dramatic deviation in the conclusions. Many articles in consumer behavior use experimental controls.