Conjoint research helps measure consumer preferences. Conjoint surveys present respondents with a series of hypothetical products that include different combinations of features and prices. By analyzing respondents’ choices between those products, researchers can determine how important particular attributes are to consumers.
This approach is frequently used by marketers evaluating new products or campaigns. In litigation, however, conjoint analysis is used to assign a dollar value to a product feature or alleged defect that is at issue in the litigation. Courts have increasingly seen this method proposed or used to evaluate damages in consumer class actions.
Measuring “Price Premium”
When plaintiffs seek damages for a product defect or misrepresentation in advertising, both sides must determine how the alleged issue affected the product’s value. Conjoint survey research helps estimate the price premium, or the additional amount consumers are willing to pay for a product with a particular attribute, or without an alleged defect.
A choice-based conjoint survey measures this by presenting respondents with different product scenarios and analyzing how differences in the price and features of the products influence their selections. These results can then be used to estimate how much value consumers place on the attribute at issue. Frequently, this kind of survey result is combined with economic expert testimony addressing broader market factors.
Honda Odyssey Case Study
Conjoint analysis was used in a class action lawsuit, MacDougall v. American Honda Motor Co., involving an alleged transmission defect in the Honda Odyssey minivan. Plaintiffs relied in part on a conjoint survey to estimate damages. Honda Motor Co. challenged the analysis, arguing that it failed to account for supply-side factors that influence market pricing. The district court agreed and excluded the survey evidence, concluding that the damages model relied only on consumer willingness to pay and left out an analysis of how supply might have affected price.
The U.S. Court of Appeals for the Ninth Circuit reversed the decision, ruling that survey quality should affect the weight of the evidence, not admissibility. It emphasized that conjoint analysis should not be excluded in class action cases, but should instead be evaluated on a case-by-case basis.
Conjoint Analysis in Class Actions
Conjoint analysis can estimate class-wide damages when properly designed and executed. Courts continue to closely examine survey methodology when deciding on both the weight and admission of the survey as evidence. Reliable conjoint studies require careful design, including clearly defined attributes, an appropriate survey population, and rigorous testing before fielding.
IMS Legal Strategies conducts reliable conjoint surveys and provides expert analysis in litigation matters, including class actions involving alleged product defects and damages calculations.
