Evaluate the study. Do you feel the attributes and the attribute levels were well selected? Interpret Table 21.2.

1. What information does it contain?

2. What are the underlying assumptions?

3. What additional analysis might be useful to do?

John Hirsch of Central Utility was attempting to develop conclusions from a conjoint analysis study of electrically powered trucks. The study objectives were (1) to determine the number of commercial applications that were compatible with the limitations of electric vehicles, and (2) to assess the perceived importance of those technical requirements as compared to other vehicle characteristics, such as initial costs and pollution levels.

In the first phase of the study, a sample of truck owners was interviewed and the nature of their applications was determined. They found that 11 percent of commercial truck applications could get along with the electric vehicle limitations of a 4‐mile range, a maximum of 40 stops, a load limit of 1,500 pounds payload, and “seldom” freeway travel. The most sensitive dimension was freeway travel. If that limitation were removed, the electric vehicle could be used for 19 percent of applications. In the second phase of the study, people responsible for purchases of commercial trucks were invited to an “electric vehicle seminar at which an operating electric truck was available for inspection and test driving.” During the seminar they discussed the advantages and disadvantages of electric vehicles and participated in a conjoint analysis study.

As Table 21.2 indicates, the conjoint study involved five attributes, each of which had two levels associated with it. For example, the initial price was either $5,000 or $8,000. The respondents were those attending the electric vehicle seminars. Each respondent was asked to rank 16 alternative truck designs, based on the attributes shown in Table 21.2. The rankings of the respondents were averaged and provided the inputs to a conjoint analysis program. The output utilities also are shown in Table 21.2.

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Table 21.2 Relative Utilities of Conventional versus Electric Vehicles Attribute Conventional vehicle Utility Electric vehicle Utility Speed and range Unlimited +1.426 40 mph and 40 miles -1.426 Operating costs Standard: 20 cents/mile -0.928 Reduced: 10 cents/mile +0.928 Initial price Standard: $15,000 +0.901 Premium: $18,000 -0.901 Pollution levels Standard: Gasoline engine -0.544 Zero +0.544 Propulsion system Conventional: Gasoline engine -0.019 New propulsion system +0.019 Net utility +0.836 Net utility -0.836