Why we herd and how it can harm us
When you see a long line of people in front of the latest 'it' cafe, do you join it, or go elsewhere? Whether its a frenzied house auction in a popular suburb or the queue of people out the front of a new cafe, the human instinct to herd is hard to fight.
Behavioural economist Michelle Badelley from the Institute for Choice featured on an ABC RN Life Matters Podcast on Friday the 19th May at 9:30am, explaining why we as humans herd when making consumer decisions, and what we can miss out on when we do.
You can listen to and download the podcast here.
Queueing at the front of cafes is a common phenomenon, even in the rain. (Flickr/Garry Knight/)
Professor Andreas Schafer discusses his research on Transportation in a Carbon Constrained World.
Professor Michelle Baddeley features in the latest Social Science Bites podcast, explaining how human beings are social animals and as such the instinct to herd is hardwired into us.
In this latest Social Science Bites podcast, Baddeley tells interviewer David Edmond how modern herding often follows from an information imbalance, real or perceived, in which a person follows the wisdom of crowds. To find out more and to listen to the podcast click here.
Professor Julie Ratcliffe discusses her research grant success and recent book “Measuring and Valuing Health Benefits for Economic Evaluation”
On Tuesday the 4th of April Dr Flavio Souza presented at the 2017 International Choice Modelling Conference in Cape Town, South Africa.
Dr Flavio Souza, from the Institute for Choice, travelled to and presented at the International Choice Modelling Conference in Cape Town, South Africa. The conference ran from the 3rd - 5th of April. The conference brought together leading researchers and practitioners from across the world and across different areas of study, including but not limited to transport studies, marketing decision making, environmental valuation and health economics.The aim of the conference was to review recent advancements in knowlege and understanding in methodology as well as real world applications of choice models and stated choice and revealed preference survey techniques.
The unintended consequences of carbon taxes on domestic fuel consumption
We specified and tested a model that captures patterns of complementarity and substitution in domestic fuel consumption for households in India. Such studies allow for more informed decisions on policies such as carbon tax and fuel subisdy as they more accurately reveal the energy demand of different fuel sources.
On Monday the 3rd of April Dr Habtamu Kassahun presented at the 2017 International Choice Modelling Conference in Cape Town, South Africa.
Dr Habtamu Kassahun, from the Institute for Choice, travelled to and presented at the International Choice Modelling Conference in Cape Town, South Africa. The conference ran from the 3rd - 5th of April. The conference brought together leading researchers and practitioners from across the world and across different areas of study, including but not limited to transport studies, marketing decision making, environmental valuation and health economics.The aim of the conference was to review recent advancements in knowlege and understanding in methodology as well as real world applications of choice models and stated choice and revealed preference survey techniques.
Making choice set formation practicable through direct elicitation of availability and choice
Misspecification of choice sets is a known major issue in choice model development. Both ignoring and misspecifying choice sets lead to biased parameter and welfare estimates. Modeling latent choice set formation is challenging due to the combinational complexity. The objective for this paper is therefore to propose a tractable Integrated Availability and Choice Model (IACM) that account for choice set formation, even in situations with many alternatives. We circumvent this complexity by considering all alternatives with some probability, which is consistent with standard microeconomics theory. However, we show how to avoid enumeration of latent choice sets to eliminate complexity.
Goal-based models for discrete choice analysis - A. A. J. Marley and J. Swait
Professor Anthony Marley and Professor Joffre Swait of the Institute for Choice have had article 'Goal-based models for discrete choice analysis' published in the journal Transportation Research Part B: Methodological.
More information as well as a download link of the article can be found here.
On Wednesday the 22nd of March Professor Joffree Swait presented at the 2017 Australian Institute of Food Science and Technology (AIFST's) Innovation Masterclass.
Event: Australian Institute of Food Science and Technology (AIFST’s) Innovation Masterclass 2017 – Disrupt your Business: “The Uber Effect”
Presentation Title: “Protecting your Brand During a Crisis: Maintaining Brand Credibility”
Presentation date: Wednesday March 22nd 2017
“Consider the impact a product recall would have on your company and take the opportunity to reflect on what corporate response could be mapped out in case of crisis.”
Behavoural Economics (A Very Short Introduction) - Michelle Baddeley
Michelle Baddeley from the Institute of Choice has recently released a new book titled Behavioural Economics which is a part of the Very Short Introductions series.
The study of behavioral economics is revealing that our lives are not that simple. Instead, our decisions are complicated by our own psychology. Each of us makes mistakes every day. We don't always know what's best for us and, even if we do, we might not have the self-control to deliver on our best intentions. We struggle to stay on diets, to get enough exercise and to manage our money. We misjudge risky situations. We are prone to herding: sometimes peer pressure leads us blindly to copy others around us; other times copying others helps us to learn quickly about new, unfamiliar situations.
This book explains why we make irrational decisions; how we decide quickly; why we make mistakes in risky situations; our tendency to procrastination; and how we are affected by social influences, personality, mood and emotions. The implications of understanding the rationale for our own financial behavior are huge. Behavioral economics could help policy-makers to understand the people behind their policies, enabling them to design more effective policies, while at the same time we could find ourselves assaulted by increasingly savvy marketing. Michelle Baddeley concludes by looking forward, to see what the future of behavioral economics holds for us.
Professor Julie Ratcliffe to join expert advisory group for the National Institute for Health and Care Excellence (NICE)
Professor Julie Ratcliffe from UniSA's Institute for Choice has been appointed to a key role on the United Kingdom's national body for providing guidance and advice to improve health and social care. Prof Ratcliffe, a professor in Health Economics, has accepted the invitation to join an expert advisory group for the National Insitute for Health and Care Excellence (NICE).She is an invited international Health Economist Member of the Expert Advisory Group for Development of Social Care Economic Evaluation Methods for NICE Social Care Guidelines.The guidelines make evidence-based recommendations on the effectiveness and cost-effectiveness of social care interventions and services. Read more about them on the NICE website.
Excited to announce that the Institute for Choice are part of the $55 million iMOVE CRC funded research!
"The iMOVE CRC is tackling the growing challenges to efficient movement of people and freight. It is exploiting the digital revolution and evolving vehicle technologies to enable traffic to flow more smoothly, create more efficient connections between transport modes and provide choice to travellers and freight operators through real time information. In this way it will deliver reduced congestion, fuel use and emissions, and improved national productivity and international competitiveness."
Dr. Ali Ardeshiri recently went to the 61st Australian Agricultural & Resource Economics Society (AARES) Annual Conference which was in Brisbane to present his paper.
Presentation title: “Towards more representative travel cost modelling: an economic valuation of the NSW protected area network”
Presentation date: Thursday 9th February, 2017
Invited to present at: 61st Australian Agricultural & Resource Economics Society (AARES) Annual Conference, Brisbane, 8-10 February 2017
Abstract: Travel cost modelling has been used to value recreational sites since the 1940s, but typically, studies have relied on data collected through on-site survey at a relatively small number of sites. Our study explores the implications and advantages of shifting towards more representative survey methodologies. We have analysed data from a random stratified phone survey of more than 60,000 households across four states and territories (NSW, QLD, Victoria and the ACT) in which survey respondents were questioned about their recent use of any and all of the 728 protected areas across NSW. We have used novel travel cost modelling techniques, including ordered choice modelling and zero-inflated choice set formation, to estimate consumer surplus and identify key drivers of recreational demand. This methodology confers a range of advantages over traditional analysis techniques, including the capacity to ensure value estimates are robustly and representatively scaled to the broader population, the ability to undertake empirical analysis of the distributional effects, and a means of imputing visitation rates to individual sites across a protected area network – including low visitation sites for which data is usually unavailable. We provide the first revealed-preference estimate of the tourism and recreation value of an entire protected area network and explore implications for strategic development of recreational opportunities within the NSW protected area network.
2017 Choice Modelling Symposium
On the 13th of February, Dr Akshay Vij presented his paper 'Integrated choice and latent variable mobels: looking back and moving forward' at the 2017 Choice Modelling Symposium.
The description of this talk was as follows:
'Integrated Choice and Latent Variable (ICLV) models are econometric models of individual behavior that attempt explicitly to model the cognitive process underlying the formation of any choice. The ICLV model combines discrete choice models and structural equation models under a single unified framework that recognizes the influence of both observable economic variables and latent psychosocial constructs on behavior.
Though much progress has been made in terms of model development and estimation, concerns remain regarding the value of the framework to practitioners and policy-makers. On one hand, ICLV models appear to be powerful methods with which to enhance existing representations of decision-making. They allow for the proper integration of psychometric data within extant model frameworks and provide statistical tools with which to test complex theories of behavior. On the other, questions have been raised regarding the practical benefits of the framework. Does an ICLV model fit the choice data better than a simpler choice model without latent variables? Can findings from an ICLV model be used for policy analysis in ways that are not already possible using choice models without latent variables?
This talk will systematically evaluate the benefits of the ICLV model framework over a more traditional choice model without latent variables, using a set of criteria based on statistical considerations and relevance to practice and policy. Analytical proofs will be presented that demonstrate the practical value of the framework, and findings from both synthetic and real datasets will be used to corroborate any conclusions. The talk will close by outlining an agenda for future research on the subject.'
Measuring and Valuing Health Benefits for Economic Evaluation - Julie Ratcliffe
Julie Ratcliffe has recently released a new book called Measuring and Valuing Health Benefits for Economic Evaluation which was published by the Oxford University Press.
Measuring and Valuing Health Benefits for Economic Evaluation examines the measurement and valuation of health benefits, reviews the explosion of theoretical and empirical work in the field, and explores an area of research that continues to be a major source of debate. It addresses the key questions in the field including the definition of health, the techniques of valuation, and the problem of choosing the right instrument.
> more information (PDF 501Kb)
"Stated choice methods and analysis for understanding individual decision making for improving health outcomes”
Dr Elisabeth Huynh (pictured) presented at the Hiroshima Institute of Health Economics Research (HiHER) at Hiroshima University, Japan, on the 2nd of February 2017.
Presentation title: “ Stated choice methods and analysis for understanding individual decision making for improving health outcomes”
Seminar date: 2nd February, 2017
Invited to present at: Hiroshima Institute of Health Economics Research(HiHER) at Hiroshima University, Japan
Summary: Stated Choice Methods have become an increasingly used to elicit stated preference in health economics to address a wide range of policy questions. A number of examples of choice modelling applications in the realm of health economics will be presented. The application contexts will range from dental workforce in Australia to multi-comorbidity in elderly populations. The examples will be used to illustrate the flexibility of the technique, limitations and challenges involved.
'Capturing Context-Sensistive Information Usage in Choice Models via Mixtures of Information Archetypes'
Prof Joffre Swait and co-authors Dr Monica Popa and Dr Luming Wang discuss in their recent JMR article the quesion of how much information consumers are actually using when making a product choice. This article has been featured in the American Marketing Association 'Article Snapshots' which is avaible online here.
Ageing in South Australia 2015: Insights from the Aged Care Sector
Dr Elisabeth Huynh (pictured far right) presented at the Ageing in South Australia 2016 Forum: Insights from the Aged Care Sector on Monday, 5 September 2016, hosted by the University of South Australia.
Dr Huynh presented insights into lifestyle attitudes as part of a productive schedule dedicated to examining attitudes, perceptions and strategies of agencies working in aged care in South Australia. The Ageing in South Australia 2016 report is available online here:
I4C Research Lab Invitation
The Institute for Choice hosts a Research Lab every two weeks, where researchers are invited to talk about a research project that they are currently working on, and receive feedback from staff at the institute. The purpose of these seminars is to provide researchers a ‘safe’ forum in which to discuss work that might not be ready yet to be critiqued by a broader audience.
Researchers who have presented at these sessions in the past have ranged from first year Ph.D. students to senior academics. Researchers from other research centers and universities are more than welcome to present at the Lab.
If you would like to present, or for more information, contact Akshay.Vij@unisa.edu.au.
'Are Lies The New Recipe For Ad Success?'
Dr Nico Neumann discusses the dangers of unethical practice in the marketing and media sphere in his opinion piece for Media Daily News.
Read full article
Capturing Context-Sensitive Information Usage in Choice Models via Mixtures of Information Archetypes
Congratulations to Professor Joffre Swait who was invited to present a seminar on his forthcoming journal at the School of Marketing/Australia Business School, University of New South Wales.
'Is it Time to Disrupt the Murky Media-Agency Business Model?'
Dr Nico Neumann argues in this guest post that it is time for marketers to have a long hard look under the bonnet of their media agency's trading desk.
Read full article
Room with a Patient View 2016
A conference aimed at increasing patient engagement in health technology assessment in Australia.
'The Impact of 100% Viewability on Advertising Economics'
Dr Nico Neumann addresses this topic in his most recent opinion piece for AdNews.
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2016 Market Predictions Panel
Dr Nico Neumann participated in an Orange Line panel sharing their predictions on the digital marketing landscape for 2016.
Read full article
'Ad-Tech Consolidation and the Rule of Three'
Dr Nico Neumann puts forth fresh new ideas in his column for AdExchanger.
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'A Solution to Reduce Viewability Concerns- Algorithmic Attribution Modelling'
Dr Nico Neumann addresses this topic in his opinion piece published in AdNews.
Read full article
'"One Score to Rule Them All" Demystifying the Net Promoter Score' - By Jorge Arana and Simon Fifer
Watch our affiliate, Professor Jorge Arana, present on this topic at the University of New South Wales.
'Why are last-touch models still in place?'
Dr Nico Neumann tackles this issue in his opinion piece published in AdNews.
Read full article
14th IATBR Conference: 'A Goal-Driven Perspective on Choice Behaviour and Choice Models'
Congratulations to Professor Joffre Swait, who presented the keynote at the 2015 International Association for Travel Behaviour Research conference held in Windsor, England. The objective of the keynote was to stimulate thought and research concerning the explicit representation of goals in models of choice behaviour. As one of the preeminent research venues in the transport sector, IATBR is an important event at which to bring in new ideas for the formulation and development of behaviourally motivated choice models. There was lots of interest in the goals topic, which may presage interesting future research by transport modellers.
Click here to download the keynote
'Budget Research Shows People Want Consistency'
Congratulations to Dr Ali Ardeshiri for his live interview with Ian Henschke from ABC radio about his budget research on the 24th of June. Exerts from this interview were published in the July 2015 edition of the UniSA news.
Read full article
'Good, good, good... good citations'
Congratulations to Professor Jordan Louviere for climbing to 25,198 citations this year. Read about his success in the achievements and announcements in the December 2014 edition of the UniSA News.
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'You choose: I4C helps you understand why'
Institute for Choice feature article published in the UniSA Business magazine.
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Review of Marketing Research Long Term Contribution Award
Congratulations to Professor Jordan Louviere who is co-recipient of the Naresh K. Malhotra award for the article that has made the greatest long-term contribution among those published in the Review of Marketing Research. All articles published in volumes 1-7 were eligible for consideration.
Louviere, J. J. & Meyer, R. J. (2008). 'Formal choice models of informal choices: What choice modelling research can (and can't) learn from behavioural theory. Review of Marketing Research, 4, pp. 3-32.
2014 Charles Coolidge Parlin Board of Governors
Congratulations to Professor Jordan Louviere who has accepted the invitation from the American Marketing Association to serve on the Parlin Award Board of Governors. To be awarded the annual Charles Coolidge Parlin Marketing Research award, distinguished academics and practitioners must have demonstrated outstanding leadership and sustained impact on advancing the evolving profession of marketing research over an extended period of time. Professor Louviere was a recipient of the Parlin Award in 2010.
Read full media release
Outstanding AJAE Article Award
Professor Joffre Swait, Director: Academic, of the Institute for Choice, in collaboration with Vic Adamowicz, has been awarded the 2014 Agricultural and Applied Economics Association Outstanding AJAE Article Award. The publication is listed below.
Adamowicz, Wiktor and Joffre Swait (2012) 'Are food choices really habitual? Integrating habits, variety seeking and compensatory choice in a utility maximizing framework,' American Journal of Agricultutal Economics, doi: 10.1093/ajae/aas/078, 1-25.
Link to Journal
UniSA launches new expert Institute in choice behaviour and modelling
The University of South Australia is set to launch a new research institute focusing on decision-making and choice behaviour that will bring together the highest concentration of academic expertise in choice behaviour research globally.
The new Institute for Choice will be Sydney-based and have an academic staff and affiliates comprising experts from Australia and overseas.
UniSA Vice Chancellor Professor David Lloyd says the new venture, which will have its own Sydney shop front, represents the modern collaborative research face of UniSA.
Read full media release
Institute for Choice Launches 2014 Seminar Series
The Institute has launched its program for the exciting 2014 Seminar Series. Check the list regularly for updates and additions.
Seminar Series 2014
Executive Education Coming Soon
The Institute will be offering Executive Education, designed to keep industry abreast of the latest research techniques, so organisations can better understand how choice and decision making impacts their stakeholders.
New Office for Institute for Choice
The Institute for Choice will launch its purpose built Sydney office on 17 February 2014. With a central location at Level 13, 140 Arthur Street, the newly appointed North Sydney facility features a state-of-the-art boardroom and seminar/meeting room, and offers an open space that encourages dialogue and communication.
The University of South Australia has chosen to locate the Institute for Choice in the vibrant business and academic environment of Sydney, to provide easy access to our internationally recognised research centre.