Insufficient discriminant validity: A comment on Bove, Pervan, Beatty, and Shiu (2009)

Bove, Pervan, Beatty, and Shiu [Bove, LL, Pervan, SJ, Beatty, SE, Shiu, E. Service worker role in encouraging customer organizational citizenship behaviors. J Bus Res 2009;62(7):698-705.] develop and test a latent variable model of the role of service workers in encouraging customers' organizational citizenship behaviors. However, Bove et al. [Bove, LL, Pervan, SJ, Beatty, SE, Shiu, E. Service worker role in encouraging customer organizational citizenship behaviors. J Bus Res 2009;62(7):698-705.] claim support for hypothesized relationships between constructs that, due to insufficient discriminant validity regarding certain constructs, may be inaccurate. This research comment discusses what discriminant validity represents, procedures for establishing discriminant validity, and presents an example of inaccurate discriminant validity assessment based upon the work of Bove et al. [Bove, LL, Pervan, SJ, Beatty, SE, Shiu, E. Service worker role in encouraging customer organizational citizenship behaviors. J Bus Res 2009;62(7):698-705.]. Solutions to discriminant validity problems and a five-step procedure for assessing discriminant validity then conclude the paper. This comment hopes to motivate a review of discriminant validity issues and offers assistance to future researchers conducting latent variable analysis.     

Empirical tests of canonical nonparametric American option‐pricing methods

Alcock and Carmichael (2008, The Journal of Futures Markets, 28, 717–748) introduce a nonparametric method for pricing American‐style options, that is derived from the canonical valuation developed by Stutzer (1996, The Journal of Finance, 51, 1633–1652). Although the statistical properties of this nonparametric pricing methodology have been studied in a controlled simulation environment, no study has yet examined the empirical validity of this method. We introduce an extension to this method that incorporates information contained in a small number of observed option prices. We explore the applicability of both the original method and our extension using a large sample of OEX American index options traded on the S&P100 index. Although the Alcock and Carmichael method fails to outperform a traditional implied‐volatility‐based Black–Scholes valuation or a binomial tree approach, our extension generates significantly lower pricing errors and performs comparably well to the implied‐volatility Black–Scholes pricing, in particular for out‐of‐the‐money American put options. © 2009 Wiley Periodicals, Inc. Jrl Fut Mark 30:509–532, 2010     

Determinants of holistic passenger experience in public transportation: Scale development and validation

Transportation literature is shifting its focus from passengers’ perception of transit quality to understanding passenger experience from a holistic perspective. Few studies have investigated passenger experience factors from a holistic perspective; however, they are explored independently. A holistic approach can help the transport service providers to understand the complete journey of the passenger. This study proposes the concept of holistic passenger experience (HPX) and identifies the determinants of HPX in the context of public transportation with specific reference to Indian Railways. The study develops a comprehensive scale that measures the influence of these determinants on HPX to address this gap. Following a systematic scale development process, this study identified and validated (content, construct, convergent, and discriminant validity) a seven factor structure scale that determines HPX. Of these seven factors, four factors (vehicle maintenance, comfort & security, off board service, and travel information) constitute the core services offered by the transport service provider. Interestingly these four factors can be effectively managed by the service provider. The other three factors (social environment, supporting services, and accessibility) cannot be entirely managed by the transport service provider effectively, as these factors fall beyond the scope of the service provider.Nomological validity results are explained by constructing a matrix (holistic passenger experience Matrix) which reveals that most of the constructs that are can be managed by the transport service provider can be mapped to the cognitive component of customer experience, whereas most of the factors which go beyond the scope of the transport service provider could be mapped to the emotional component of customer experience. The findings can assist the transport sector executives to identify the key determinants to deliver superior passenger experiences throughout the journey.     

Measuring service performance in mobile communications

With the rapid growth in the size of the cellular phone market, performance standards are emerging as the strategic imperative for the service providers in ensuring customer satisfaction. This article develops and validates a psychometrically sound multi-item measure of service performance in mobile communications. A pool of 16 items was developed to cover the hypothesised multiple aspects of service performance and tested using a sample of 120 customers. The construct validity of the multi-aspect service performance measure was evaluated through assessing convergent, discriminant and predictive validity.     

Measuring Service Quality in IT Services: Using Service Encounters to Elicit Quality Dimensions

ABSTRACT

Recent growth of personal computing and networked systems have resulted in Information Systems (IS) departments facing a heavy demand on their services. Based on internal marketing concepts, IS services need to use a measure of service quality for their internal customers. Studies carried out recently, suggest SERVQUAL as a possible measure of IS service quality. However, there are some issues that relate to their discriminant validity and appropriateness. A bottom-up approach to elicit service quality dimensions is explored using service encounters in a health organization. The results indicate that while the dimensions of responsiveness and assurance seem to be important, there is a need to re-look at these broad dimensions as more specific dimensions may be more appropriate for IS settings.     

The shopping list in goal-directed shopping: scale development and validation

This paper aims to develop and validate a shopping list scale in a goal-directed shopping context based on three complementary study phases (and literature review): shopper interviews (exploratory stage to identify the items and dimensions), a pilot study with 162 respondents for scale purification, and a refined questionnaire administered to 213 respondents (to establish reliability, convergent, discriminant and nomological validity). An exploratory factor analysis shows that the items load onto four factors: memory aid, money controller, shopping controller, and deviation controller. We performed confirmatory factor analysis to test the model and check for reliability and validity of the anticipated scale. The model fit and reliability levels are acceptable, as are the convergent and discriminant validities of the scale. The scale is a second-order factor, thus satisfying nomological validity. The shopping list scale should be of interest to researchers and retail managers in exploring factors and outcomes of goal-directed shopper behaviour.     

Narrow framing: Professions,sophistication, and experience

We document support for the narrow framing effect proposed by Tversky, A. and Kahneman, D. (1981). Our findings that traders in an options market frame complicated investment decisions into simpler ones support the narrow framing effect. Traders' professionalism, sophistication, and trading experience are negatively correlated with the degree of narrow framing, implying that these factors help to reduce investors' behavioral bias. Our study bridges the gap between the psychological literature and financial literature in terms of the relationship between experience/sophistication and narrow framing. The article sheds light on the decision‐making process in an options market, and the relationship between narrow framing and sophistication/experience. © 2009 Wiley Periodicals, Inc. Jrl Fut Mark 30:203–229, 2010     

TANGSERV

ABSTRACT

This paper seeks to explore the domain of tangible quality construct; reviews the existing literature and then proceeds to develop a scale called TANGSERV for measuring tangible quality in food service industry. It captures ambient factors such as music and temperature; design factors such as location and seating arrangement; and product/service factors such as food presentation and food variety. Procedure used in constructing and refining a multiple-item scale is described. Moderately high factor loadings (between 0.725 and 0.799) and an a value of 0.76 suggests that scale is stable and reliable. Similarly, confirmatory factor analysis results show that factor loadings (between 0.660 and 0.830) are significant enough to claim convergent validity while a chi-square difference of 76.830 between fixed and freely estimated models provides an evidence of discriminant validity.     

Do Mystery Shoppers Really Predict Customer Satisfaction and Sales Performance?

Mystery shopping (MS) is a widely used tool to monitor the quality of service and personal selling. In consultative retail settings, assessments of mystery shoppers are supposed to capture the most relevant aspects of salespeople’s service and sales behavior. Given the important conclusions drawn by managers from MS results, the standard assumption seems to be that assessments of mystery shoppers are strongly related to customer satisfaction and sales performance. However, surprisingly scant empirical evidence supports this assumption. We test the relationship between MS assessments and customer evaluations and sales performance with large-scale data from three service retail chains. Surprisingly, we do not find a substantial correlation. The results show that mystery shoppers are not good proxies for real customers. While MS assessments are not related to sales, our findings confirm the established correlation between customer satisfaction measurements and sales results.     

A correlated uniqueness model of service quality measurement among users of cloud-based service platforms

This research furthers understanding of whether consumers of cloud-based service platforms can distinguish between gap theory dimensions (i.e., expectation and performance) on these platforms. We build upon and extend the work of (Natesan and Aerts, 2016) by applying confirmatory factor analysis on gap scores from survey data to develop and test an improved approach of measuring service system quality in cloud-based service platforms. Using the IS-adapted SERVQUAL instrument, we apply the correlated uniqueness model, which is part of the multitrait-multimethod (MTMM) framework, to evaluate the validity of using GAP scores and account for the effect of the method. There is significant support for method effects as shown by our suggested model paths in the trait convergent validity model with medium-large factor coefficients. Additionally, the fit of the correlated uniqueness model indicates respondents can distinguish between the gap theory dimensions of the IS-adapted SERVQUAL instrument. The praxis of service quality measurement could benefit by using our measurement approach of incorporating error correlations.     

An Assessment of the CETSCALE in a Developing Country

Abstract

Researchers have been exhorted to test the psychometric properties of instruments used in cross cultural studies and ascertain their validity and reliability in order to make the results emanating from the use of such instruments generalisable. This study answers such a call for rigorous evaluation of the psychometric properties of cross-national measures that are valid and reliable. The study reports the findings of an assessment of the psychometric properties of the consumer ethnocentric tendencies scale (CETSCALE) in the developing West African country of Ghana. More specifically, the study explores CETSCALE's unidimensionality, internal consistency, and discriminant validity. The findings of our study are both consistent and inconsistent with the extant literature. In particular, while our analysis indicates that the CETSCALE is internally consistent and exhibits discriminant validity, it is not unidimensional as has been reported in earlier studies. Marketing and research implications of the study are suggested.     

The performance of VIX option pricing models: Empirical evidence beyond simulation

We examine the pricing performance of VIX option models. Such models possess a wide‐range of underlying characteristics regarding the behavior of both the S&P500 index and the underlying VIX. Our tests employ three representative models for VIX options: Whaley ( 1993 ), Grunbichler and Longstaff ( 1996 ), Carr and Lee ( 2007 ), Lin and Chang ( 2009 ), who test four stochastic volatility models, as well as to previous simulation results of VIX option models. We find that no model has small pricing errors over the entire range of strike prices and times to expiration. In particular, out‐of‐the‐money VIX options are difficult to price, with Grunbichler and Longstaff's mean‐reverting model producing the smallest dollar errors in this category. Whaley's Black‐like option model produces the best results for in‐the‐money VIX options. However, the Whaley model does under/overprice out‐of‐the‐money call/put VIX options, which is opposite the behavior of stock index option pricing models. VIX options exhibit a volatility skew opposite the skew of index options. © 2010 Wiley Periodicals, Inc. Jrl Fut Mark31:251–281, 2011     

Market Orientation: Scale Invariance and Relationship to Generic Strategies Across Two Countries

This article presents a scheme for investigating scale invariance for the market orientation construct across different countries by examining the psychometric properties of the operationalisation of market orientation (Narver and Slater, 1990). We investigate the measurement of market orientation in two countries (Australia and Zimbabwe—one being an example of a developed economy, the other of a developing economy). We then proceed to test the relationship between market orientation and Porter's (1980) generic strategies. The results suggest that the psychometric properties of the market orientation construct differ in important respects across countries. However, tests for convergent, predictive and discriminant validity using the generic strategies are fully supported for Zimbabwe while for Australia they are supported mutatis mutandis.     

Importance of offline service quality in building loyalty of OC service brand

Customer management becomes increasingly important as consumers have more flexible shopping process and options and competition become intensified in omni-channel (OC) retail environment. OC retailer can facilitate customer communication of OC service with OC service brand. This study evaluates an OC service brand (i.e. SSG OC service brand) to explore the effectiveness of integrated OC service platform which has a standing brand identity, and to determine the importance of selected offline characteristics of OC service on loyalty of OC service brand. Survey of 127 respondents was collected to test Partial Least Squares-Structural Equation Modeling (PLS-SEM). Findings show that tangibility and empathy of offline OC service directly affect customer satisfaction and attitude toward overall OC service brand, confirming the importance of offline service quality of OC in the OC service brand management.     

The impact of online customer satisfaction on the yahoo auction in Taiwan

In this article, the authors develop a conceptual model that links website quality, trust, merchandising, customer service, and online satisfaction for yahoo auction in Taiwan. The research objective is to provide initial evidence for the determinants of e-satisfaction (online satisfaction). We examine the role of web quality, trust, merchandising, and customer service in consumer online satisfaction assessments. This conceptual model is empirically tested from 350 consumers across a broader group of online shoppers on yahoo auction by means of internet surveys and structural equation analysis. The results show that the determinants of online trust are website quality, merchandising, and customer service. Website quality, trust, merchandising, and customer service have positive effects on online satisfaction for auction sites. The research findings were reported by discussing the implications of the findings and directions for future research.     

The impact of off‐market trading on liquidity: Evidence from the Australian options market

This study investigates the impact of reducing the contract size threshold for off‐market trading on transaction costs in an options market. This study provides evidence that market makers compete more aggressively for small‐to‐medium trades and quote mid‐size depths more often after the regime change. Results also indicate that small‐to‐medium trades incur lower transaction costs; however, large trades that are executed on the central limit order book do not benefit from the structural transition. Given recent frictions imposed by regulators on equity markets, these results suggest that options markets provide an effective means for investors to replicate short‐selling in underlying securities. © 2009 Wiley Periodicals, Inc. Jrl Fut Mark 30:361–377, 2010     

Consumers' engagement with social media activation campaigns: Construct conceptualization and scale development

This study conceptualizes the consumers' engagement with social media activation campaigns, which are important tools in improving the interactions between brands and consumers. We offer a comprehensive definition of this construct and discuss the nature and dimensionality of it. Further, this paper reports the development and validation of a 12‐item scale for measuring the aforementioned construct. This scale development process comprises four studies. Study 1 begins by generating a pool of items and then employs both a panel of experts and some Instagram users to examine the content validity of the items. To validate the scale, this paper carries out several online surveys in subsequent studies. Study 2 uses exploratory and confirmatory factor analysis (CFA) to remove the problematic items and evaluate the dimensionality of the construct. In Study 3, we conduct iterative CFAs to purify the scale and reassess the psychometric properties of the scale. Study 4 uses structural equation modeling to test the nomological validity. Our analyses reveal that consumers' engagement with social media activation campaigns is a second‐order construct encompassing three first‐order dimensions (cognitive, emotional, and behavioral engagement). The results also support the reliability, content validity, convergent validity, discriminant validity, known group validity, and nomological validity of the engagement scale.     

Measurement of organizational investments in social capital: The service employee perspective

This paper describes the development and validation of a measure of organizational investments in social capital (OISC). The scale development process is carried out over three stages (item generation, scale purification, scale validation), with two separate data collection phases involving a total of 735 working adults from multiple and diverse service-related workplace settings. As such, the data provide evidence for the face, content, discriminant, convergent and nomological validity, dimensionality and reliability of the OISC measure. The OISC measure is a concise, unidimensional scale that has the potential for significant usage in the development and testing of theory, as well as practical application in retail and other service provision contexts.     

Value Co-Creation in Business-to-Business and Business-to-Consumer Service Relationships

Abstract

The purpose of this study is to examine the interrelationships among value co-creation, switching costs (SC), and customer share (CS) in both business-to-business (B2B) and business-to-consumer (B2C) relationships. In spite of increasing attention to value co-creation in the Service Dominant Logic, there are only a limited number of empirical studies on this concept. Furthermore, few researchers have investigated the inter-relationship among value co-creation, SC, and CS in a single framework for both B2B and B2C relationships, although many enterprises serve both types of customers. The conceptual framework is developed primarily based on relationship marketing and services marketing. This study evaluates six hypotheses, analyzing survey data from 209 enterprises and 337 individuals by structural equation modeling (SEM). Further, confirmatory factor analysis (CFA) is conducted to confirm the convergent validity and discriminant validity. In conclusion, the positive impact of execution of value co-creation (EVC) activities on SC and CS is supported with appropriate statistical evidence in both B2B and B2C relationships. Also, the causal relationship between values in relational exchanges (VRE) and CS is confirmed with adequate empirical findings for both relationships. These results suggest to marketing managers that service firms may achieve larger CS by executing value co-creation activities and providing VRE for customers.