Page 181 - DMGT209_QUANTITATIVE_TECHNIQUES_II

Quantitative Techniques-II

Notes 7. A certain amount of income should be saved and invested.

8. The future is uncertain and investments will protect us.
9. Some amount of savings and investments are a must for every individual.
10. One should try to save more so that most of it could be invested.

11. All savings should be invested for the future.
Conclusion: A respondent agreeing to statements 8, 9 and 11 would be considered
having a favourable attitude towards savings and investments. The person agreeing
with statements 2, 3 and 4 is an individual with an unfavourable attitude. Also, if a
respondent chooses statements 1, 3, 7 or 9, his attitude is not considered consistent.
Merits of Thurstone Scale:

1. Very reliable, if we are measuring a single attitude.
2. Used to find attitude towards issues like war, religion, language, culture, place of worship,
etc.

Limitations:
1. Limited use in marketing research, since it is time consuming.
2. Collecting a number of statements (100-200) makes it a very tedious job.

3. Bias on the part of the judges cannot be avoided.
4. It is an expensive method.

Juster’s 11-point Probability Scale (Juster Scale)

In 1966, Professor F. Thomas Juster argued that since verbal intentions are simply disguised
probability statements, then why not directly capture the probabilities themselves as measured
by the respondents.
Juster’s 11 point probability scale can be used to produce estimates of the average probability
that a population will do something by a future time. Since what is being measured is a probability,
the mean response estimates the proportion of the population that will perform the behaviour
at issue.
An example is given by the question, “On a scale of 0-10 where 0 indicates no chance and
10 indicates certainty, what is the chance that you will change your primary bank in the next
12 months?” If then the average response is 3.2, this translates to 32% of the population intend to
switch banks.
The Juster scale in its many applications has been found to be superior as a predictive measure
of future purchase behaviour than other intentions scales. The distribution of responses, however,
has been found to affect the predictive accuracy of the scale. Not surprisingly, the greater the
variation in responses, the less accurate the predictions.
Studies have shown that purchase probabilities can be over or under estimated by the Juster
scale, but on average, it is the most consistent in accurately predicting actual purchase rates.
There are important issues to be considered in the administration of the Juster Scale that have
been found to contribute to variation in its effectiveness. These include unfamiliarity of the
respondent with new products, training of the administrator and differences in age and education
level of respondents.

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