Using Conjoint Analysis as a Basis for Damages Calculations in Class Action Litigation

Conjoint analysis is a survey technique and discrete-choice model used in market research to measure consumer preferences for products and services. It has been widely used in quantitative market research for over 50 years and is the subject of an enormous amount of academic research.

Applied Marketing Science, Inc. (AMS) has been involved in dozens of class action studies where conjoint analysis has been used in support of plaintiffs to grant class certification. Many of these cases have gone on to achieve favorable settlements.

When looking at using conjoint analysis for class action surveys, there are several important outputs from the analysis that can be used as a basis for damages calculations, such as reduction in market value and price premium. 

	Reduction in market value: How much less money a consumer would have paid if they had known they would not receive a promised feature at the time of purchase or if they had known a feature they were promised was defective.
	Price premium: How much more money a consumer may have paid due to a misleading or omitted claim or label on a product.

In a survey setting, respondents are presented with a series of choice tasks that break down a product into its attributes and levels of those attributes.

Attributes: The features that make up or describe a product. 

Levels: The specifications of those attributes. 

It is important that the model includes the attribute of interest in the class action case, such as a scenario with and without a vehicle defect, or with and without the misleading or omitted product label. Other distractor attributes are added to the design of the conjoint survey to ensure that the survey is not leading respondents to know the purpose of the study.  

Below is an example of a hypothetical conjoint choice task involving labeling claims on a snack bar. 

Below is an example of a hypothetical conjoint choice task involving a vehicle defect. 

When deciding whether to use conjoint analysis as a research methodology for your class action litigation matter, it is important to consider a few things to avoid potential points of criticism. This includes (but is not limited to) the following: 

• Working with a testifying survey expert and research firm that are well-versed in survey and analysis methods.  
• Working with economists who know the right ways to use the results of a conjoint analysis, specifically for class action matters. 
• Choosing the right attributes and levels for a conjoint study that accurately describe the product. 

In the context of litigation matters, surveys and survey experts are routinely criticized for the decisions made and the methodologies used in the survey’s design. When deciding whether conjoint analysis is appropriate for your class action case, there are a number of factors to consider. Among them are the following: 

• Can the relevant consumers or decision makers be identified, and can they be interviewed in sufficient numbers? 
• Can the set of products at issue be described by one conjoint survey? 
• Can the relevant consumers understand and evaluate the attributes and the product? 
• Can enough attributes be identified to include in the conjoint exercise? 
• What prices should be included in the survey? 

Webinar 

• Using Conjoint Analysis as a Basis for Damages Calculations in Class Action Litigation 

Case Studies 

• Proposed damages model using AMS conjoint analysis survey helps grant class certification 
• Sport-Utility Vehicle class action survey using AMS conjoint analysis survey achieves settlement valued at $37 – $99 million
• Sport Utility Vehicle class action survey using AMS conjoint analysis survey passes Daubert challenge
• AMS survey using conjoint analysis supports $60 million damages award 

Blog Posts 

• AMS Announces Principal Patricia Yanes as Testifying Survey Expert with Specialty in Conjoint Analysis 
• AMS Marks 20th Class Certification Ruling Supporting Conjoint Analysis as a Basis for Damages Models in Class Actions 
• Judge Rules Conjoint Analysis Using Real-World Supply-Side Data Satisfies Daubert 
• US District Court Grants Class Certification against Post Foods Based on AMS Conjoint Surveys 
• The Value of Proposing Conjoint Analysis in Support of Damages Models for Class Certification 

Find more blog posts related to conjoint analysis here. 

Have questions about conjoint analysis surveys?

Contact AMS Principal and Survey Expert Patricia Yanes to discuss.

  (781) 250-6322
  litigation@ams-inc.com