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Author of the summary here: You are right regarding the chocolate bar experiment. That's why the researchers ran multiple experiments, some of which measured
by tdmckinlay 5y ago
Author of the summary here:
You are right regarding the chocolate bar experiment.
That's why the researchers ran multiple experiments, some of which measured actual behavior:
- People were 16.1% more likely to bid for a gift card for an Everlane backpack (vs a J.Crew one) when they saw cost information about it
- Sales of chicken noodle soup bowls ($4.95) in Harvard’s campus canteen increased 21.1% when costs were disclosed
- shoto_io 5y agoHi Thomas, thanks for your work. I am a fan! Just a minor comment: I find using decimals places (like 16.1% and 21.1%) in human experiments pretty irritating. It feels like false precision. After all, these experiments must have confidence intervals. If I had to guess, I’d assume at least a +/- 5 ppts variability in all these numbers. What’s your view on that?
- tdmckinlay 5y agoThank you so much! I agree that the figures can vary for many reasons and we shouldn't expect them to be exactly the same (some things we don't end up controlling for). At the same time, if we take the experiment of the soup for example: They measured 9,227 sales of it so the 21.1% increase is quite robust and I'd expect the error margin to be much lower than 5% either way - so in some ways the precision is warranted. I also feel that if I were to round a 21.4% to 20% I'd be miscommunicating the findings of the research :)
- shoto_io 5y agoThanks for explaining! Your point about miscommunication makes a lot sense to me!
- lupire 5y agoYou are confusing confidence intervals (used to say that you are confident the increase is positive at all) with error margin (the false precision in the 3rd significant figure).
- vntok 5y agoThat does not bode well for the rest of the methodology...
- johnsmith4739 5y agoI don't know why people downvote you: //> we finally have an absolute number of sales measured, but no way of knowing - representing all sales within a period or just cherry picked? //> for the rest of the population, did it reduced sales? //> was there any randomised test or not, because in the latter case there could be other biases we're unaware of //> the increase is compared to what exactly? //> any WHY is purely speculative as what was measured was WHAT people did. Internal motivation is in this case unproven, there is just a potential correlation. //> confuses me to hell people taking about error margins and confidence intervals for something measured directly.
- boomboomsubban 5y agoMixing up terms in casual conversation happens to everyone, and is not a sign of a meaningful problem.
- tdmckinlay 5y agoYou are right, my bad! Thanks for catching that in the comment above, I've updated it
- rahimnathwani 5y ago"if I were to round a 21.4% to 20%" Right, but you'd round 21.4% to 21%, not to 20%.
- pushrax 5y agoOr ideally keep 21.4% and include the 95% CI. There’s nothing misleading about the extra precision when the CI is included.
- yowlingcat 5y agoAgreed. Actually, I wish the norm was to communicate percentages with confidence intervals by default, because I feel like the tacit implication is colloquially "100% CI unless communicated otherwise."
- infogulch 5y agoYou're assuming that you can only round to the nearest 1% which is not true at all. If you round to the nearest confidence interval and the CI is 5% then you would round to 20%. That said, I would prefer both the precise number and CI communicated together like sibling comment mentions.
- bachmeier 5y ago> I find using decimals places (like 16.1% and 21.1%) in human experiments pretty irritating. It feels like false precision. Whether you say 21.1%, 21%, or 20%, you still have a single number. You could make an argument that decimal places like 21.147258% add clutter, but without an actual measure of uncertainty, all you're doing is reporting a summary of the data in the sample with different amounts of arbitrary rounding. That's not particularly helpful as a substitute for the full distribution.
- shoto_io 5y ago21.1% is implying a different confidence interval than 21%. At least to me.
- ceh123 5y agoYup, 21% and 21.0% do implicitly convey different information even though they’re the same number.
- yuliyp 5y agoIt's not just a number. It's a string of characters conveying information about a measured value. The way it's specified conveys information about the number of significant figures (https://en.wikipedia.org/wiki/Significant_figures https://en.wikipedia.org/wiki/Significant_figures).
- phreeza 5y agoSignificant figures are not a universal standard, they are an imperfect way to in-band information about confidence, by sacrificing precision.
- Wassimo 5y agoChicken Nood Soup bowls for $4.95? Don't they usually sell for a buck at the grocery store? Unless it's a high end brand.
- istjohn 5y agoThis was in a cafeteria.
- edoceo 5y agoAt Harvard
- smeyer 5y agoMost of the cost was labor, according to the picture in the article. I don't know which dining hall or cafe the "canteen" they're referring to is, but much of the food sold on Harvard's campus is produced by unionized dining hall staff with decent pay, hours, and benefits, which affects the costs.
- klipt 5y agoPersonally I could see that information back firing, some places are very stingy with ingredients like chicken, and I'd feel doubly cheated if they did that after admitting it's only 5% of their total cost!
- robinj6 5y agoI’ll bet the Harvard students saw a new fancy chicken bowl and bought it out of novelty.
- bbarn 5y agoWhat about the "guilt effect" of showing that the high price is mostly because of the labor costs involved. Wouldn't that potentially dirty your experiment of just showing "cost" vs. involving a human element?
- CodeWriter23 5y agoIt's kind of lazy of you to disclose the Backpack and Chicken Soup cases in a declarative way. You present no references, no drill-down on whether all other effects were equal in these cases. For example, did chicken soup sales continue for an extended period of time and were not driven by other factors such as "a cold going around" or low temperatures? Trust is certainly a factor in consumer behavior, but it nowhere near the sole factor in decision-making that your 'summary' tries to present it as. You're also lacking cases where the markup is high, 500-2000% is common among a wide range of products, from Fashion to SaaS. Edit: I'd also add, in the case of food products, if all vendors adopted the transparency strategy, once consumers see typical margins in that industry are in the 5-10% range, suddenly that not-unreasonably-priced organic chocolate bar looks like a high margin item...
- dimitrios1 5y agoIt's also equally lazy for you to demand such an in depth and thorough argument and sources when you can pop into a search browser and do some fact checking yourself. No one owes you anything. This is a discussion board, not a dissertation defense.
- readflaggedcomm 5y agoFWIW, the paper "Lifting the Veil: The Benefits of Cost Transparency" doesn't mention confounding factors like weather or temperature, only the possibility of revealing labor costs. "Fact checking" this study would require reproducing it, not searching the web.
- CodeWriter23 5y agoI came up in a time where merit meant something. And this summary literally has no merit at all.
- marcinzm 5y ago>No one owes you anything. and no one owes the author page views or their time either. >This is a discussion board Exactly, we're having a discussion on what the article is missing and why it matters.
- djrogers 5y ago> - Sales of chicken noodle soup bowls ($4.95) in Harvard’s campus canteen increased 21.1% when costs were disclosed What sales decreased in relation to this? Would overall sales increase if all food items had costs listed? Or would people gravitate to the meals with the lowest margins, figuring them to be relative bargains? It's really not simple to draw a conclusion from the limited data set here.