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How to compare utilities ?


I have two attributes, price and color, and I have performed a latent class analysis. I decided to use three groups. My output is sth. like that:

Group 1
blue 10
green 40
red 15

Group 2
blue 30
green 20
red  15

blue 60
green 15
red 10

Can I compare the utility levels (e.g. blue) across the groups?
Meaning, I could say: Group 3 prefers the colour blue the most- or even twice as much as group 2?

Thanks, and merry xmas
asked Dec 21, 2017 by Jenny

1 Answer

0 votes
Utilities are interval level measures (like temperature) not ratio level (like weight or age or number of days remaining until Christmas).  They lack a "natural" zero (i.e. zero gets placed differently under different coding schemes, like dummy or effects coding of the variables).  So you cannot make ratio level statements like "Group 3 likes Blue twice as much as Group 2."

You could use the standard errors around your measures to see if the Blue utility is significantly higher for Group 3 or Group 2, etc.  If you've run choice-based conjoint please make sure to use the "Zero centered diffs" utilities rather than the raw utilities for this kind of analysis.

And Merry Christmas to you, too, Jenny.
answered Dec 21, 2017 by Keith Chrzan Platinum Sawtooth Software, Inc. (62,500 points)