[R-sig-DCM] What is a strong covariate in CBC/HB?

[Chris Chapman]

Agreed, although the form of the answer depends on the question.  My first 
thought is to conceptualize it in terms of the business problem and outcome, 
i.e., whether including the covariate changes the predicted outcome by a 
"meaningful" amount in the context of the business question.

For instance, assume the business question involves predicting market share 
from a CBC type study, and that we're comparing Product 1 vs. Product 2. 
Suppose further that the baseline preference, without using covariates, is 
estimated as 50/50.  If including covariates led to estimating preference as 
51/49 (for group 1, and vice versa for group 2, in your problem), then I'd 
say that is *not* a meaningful difference for most business contexts.  OTOH, 
seeing the estimate move to 60/40 almost certainly would be meaningful.

One might specify this in terms of standard errors, etc., but IMHO the 
bottom line is that "significance" depends on the importance of the observed 
difference for the business problem, not on the number of SEs in themselves.

--------------------------------------------------
From: "Wirth, Ralph (GfK SE)" <ralph.wirth at gfk.com>
Sent: Wednesday, March 02, 2011 10:07 AM
To: "Dimitri Liakhovitski" <dimitri.dcm at gmail.com>; "R DCM List" 
<r-sig-dcm at r-project.org>
Subject: Re: [R-sig-DCM] What is a strong covariate in CBC/HB?

> I'd say if the groups that are defined by the covariate are very different 
> with regard to their preferences (i.e. utility parameters) and at the same 
> time the members of each group are very homogeneous, then the covariate is 
> a "strong" covariate.
>
>
>
>
>
>
>
> -----Ursprüngliche Nachricht-----
> Von: r-sig-dcm-bounces at r-project.org 
> [mailto:r-sig-dcm-bounces at r-project.org] Im Auftrag von Dimitri 
> Liakhovitski
> Gesendet: Mittwoch, 2. März 2011 19:04
> An: R DCM List
> Betreff: [R-sig-DCM] What is a strong covariate in CBC/HB?
>
> Guys, I could ask some of you individually but it's always better to talk 
> to
> several smart guys at a time.
> Some of you know I am working on a project for an ART-Forum which explores
> the issue of covariates in CBC/HB estimation: Is estimation with 
> covariates
> useful?
>
> I have a question: what do YOU THINK is a "strong" covariate? (and let's
> assume we know what the true utilities and their dependence on the 
> covariate
> are)
> I am looking less for a mathematical answer (although it's OK if it is) 
> and
> more for a conceptual answer, maybe even with examples. Like: assume we 
> have
> a covariate with only 2 levels (i.e., respondents belong to 2 groups): 
> what
> should their preferences be like in order for us to be able to say: group
> membership a strong covariate / weak covariate? And if we have 3 groups?
> Also, I am looking less for a "correct" answer and more for your opinions.
>
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> Dimitri Liakhovitski
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