Influence of Ambient Temperature on Frequency and Intensity of Menopausal Hot Flashes a

Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/75642/1/j.1749-6632.1990.tb30382.x.pd

The use of indicators for unobservable product qualities: inferences based on consumer sorting

Using the dietary supplement black cohosh to demonstrate our method, we employ data on a product characteristic unobservable to consumers to decompose the contribution to consumers’ valuations of observable characteristics into surrogate indicator and direct components. Because consumers are not all “expert appraisers” of the unobservable characteristic, the measured relationship of indicators to the unobservable quality is generally not the one consumers perceive. Consequently, biases that depend upon the nature of consumers’ ineptitude are introduced into the component estimation. The researcher’s inference problem is solved by recognizing that consumers with greater appraisal expertise sort disproportionately to higher quality products. This enables feasible measurement of inept consumers’ relative valuations and conjectures through separate hedonic estimation on high- and low-quality product subsamples. We find that, relative to experts, inept consumers likely underestimate the value of most observable characteristics in indicating black cohosh product authenticity; however they overweight online product ratings.hedonic analysis; surrogate indicators; asymmetric information; pricing strategy; product strategy

The Use of Indicators for Unobservable Product Qualities: Inferences Based on Consumer Sorting

We propose a method for measuring the conjectural errors that inexpert consumers make relative to experts in using observable product characteristics as surrogate indicators of a valued unobservable characteristic. Observations on the unobservable characteristic, available to the researcher but not consumers, are used to divide the data into high- and low-quality subsamples. Separate hedonic estimation on the subsamples enables measurement of the relative valuations and conjectures of experts and non-experts with respect to indicators under the assumption that consumers sort across quality grades based on their appraisal expertise. The method is demonstrated using a small sample of SKU-level data on the dietary supplement black cohosh. Our exploratory findings on this sample suggest that, relative to experts, inexpert consumers underestimate the value of most observable characteristics as indicators of black cohosh chemical authenticity; however they overweight therapeutic claims on the product label as a negative indicator of authenticity