Crowd intelligence: Analyzing online product reviews for preference measurement

Abstract

The proliferation of product review websites produces a large, publicly accessible information resource for firms that seek to understand consumers’ preferences. To facilitate product design or improvement, we propose a novel econometric preference measurement model, the modified ordered choice model (MOCM), to extract aggregate consumer preferences from online product reviews. Moreover, to categorize customer requirements on the basis of the aggregate consumer preferences estimated by the MOCM model, we extend the Kano model and propose a marginal effect-based Kano model (MEKM). We empirically evaluate the effectiveness of the proposed MOCM model and demonstrate the utility of the proposed MEKM model.