Predicting Users’ Responses of Public Utility Services - Multivariate and Neural Network Analysis - A Case Study
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Published
Apr 8, 2018
Sreedharan S., Dr.
Poornima G.R.
Meena Nair, Dr.
Genanew Bekele Worku, Dr.
Wathiq Mansoor, Prof.
Ananth Rao, Prof.
Abstract
This research addresses the problem of predicting the user’s responses through multivariate choice (MVC) and neural network (NN) frameworks for predicting quality, quantity and overall User satisfaction of public water supply organization, BWSSB (Bangalore Water Supply and Sewerage Board) in Bangalore - India for policy initiatives. The MVC study identifies statistically significant factors that explain users’ loyalty to express satisfaction and voice to express dissatisfaction. The MVC model correctly predicts 85% of satisfied customers across satisfaction dimensions. Wald test on 1940 responses confirms that there exits cross equation correlation across quality, quantity and overall Users’ satisfaction dimensions and thus appropriateness of MVC framework over traditional logit for predicting the user responses. NN framework outperforms the econometric model with 94% correct classification of user responses. The study opens up potential research opportunities for applying the advanced analytical frameworks for predicting user responses in various public and private settings for Policy initiatives so that the service providers could improve their service delivery.
How to Cite
S., S., G.R., P., Nair, M., Worku, G. B., Mansoor, W., & Rao, A. (2018). Predicting Users’ Responses of Public Utility Services - Multivariate and Neural Network Analysis - A Case Study. International Review of Advances in Business, Management and Law, 1(1), 13–33. https://doi.org/10.30585/irabml.v1i1.53
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Keywords
Multivariate Choice Model, Neural Networks, Public Utility Service Provider, Econometric Model, Behavioural Responses, Big Data Analytics
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Articles
References
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Annoni, P., and R. Brüggemann (2009). Exploring Partial Order of European Countries, Social Indicators Research, 92: 471–487.
Bacchiocchi, E., M. Florio, and M. Gambaro (2011). Telecom Reforms in the EU: Prices and Consumers’ Satisfaction, Telecommunications Policy, 35: 382–396.
Baker, B. and Tremolet, S. (2003). Regulation of Quality: Let competing Firms Offer a Mix of Price and Quality Options, The WorldBank, Washington, DC.
Beresteanu, A. (2003). Nonparametric Estimation of Regression Functions under Restrictions on Partial Derivatives. Working Paper, Department of Economics, Duke University. http://www.econ.duke.edu/˜arie/shape.pdf.
Brudney, J.R. and England, R.E. (1982). Urban Policy Making and Subjective Service Evaluations: Are They Compatible? Public Administration Review, 42, pp.127-35.
Bougadis, J., Adamowski, K., Diduch, R. (2005). Short-term municipal water demand forecasting. Hydrological Processes, 19 (1), 137–148.
Cameron, A. C., and P. K. Trivedi (2005). Microeconometrics, Methods and Applications. Cambridge: Cambridge University Press.
Clarke, R.G. and Wallsten, S. (2003). Universal Service: Empirical Evidence on the Provision of Infrastructure to Rural and Poor Urban Consumers. In: BROOK P.J. AND IRWIN, T.C., ed, Infrastructure for Poor People: Public Policy for Private Provision. Washington, D.C.: World Bank, pp. 21-76.
Clifton, J., and D. D. Díaz-Fuentes (2010). Evaluating EU Policies on Public Services: A Citizens’ Perspective. Annals of Public and Cooperative Economics, 81 (2): 281–311.
Conway, P., and G. Nicoletti (2006). Product Market Regulation in Non-Manufacturing Sectors.
Cronin, J.J. and Taylor, S.A. (1992). Measuring Service Quality: A Reexamination and Extension. Journal of Marketing, 56, 56-68.
Das, B., Chan, E.K., Visoth, C., Pangare, G. and Simpson, R. (2010). Sharing the Reform Process: Learning from the Phnom Penh Water Supply Authority(PPWSA). Gland, Switzerland: IUCN.
Ferrari, P. A., P. Annoni, and G. Manzi (2010). Evaluation and Comparison of European Countries: Public Opinion on Services, Quality & Quantity 44: 1191–1205.
Ferrari, P. A., and A. Barbiero (2011). Nonlinear Principal Component Analysis. In Modern Analysis of Customer Surveys: With Applications Using R, edited by R. S. Kenett and S. Salini, 333–356. Chichester: Wiley.
Fiorio, C. V., and M. Florio (2011). Would You Say That the Price You Pay for Electricity is Fair? Consumers’ Satisfaction and Utility Reforms in the EU15. Energy Economics 33: 178–187.
Fiorio, C. V., M. Florio, S. Salini, and P. A. Ferrari (2007). European Consumers’ Attitudes on Services of General Interest: Accessibility, Price and Quality. Working Paper 2007-04. Milan: DEAS, University of Milan.
Gershuny, J., Bittman, M. and Brice, J. (2005). Exit, Voice and suffering: Do Couples Adapt to Changing Employment Pattern? Journal of Marriage and family,67, pp. 656-65.
Gifi, A. (1990). Nonlinear Multivariate Analysis. New York: Wiley.
Hall, D. (2006). Water and Electricity in Nigeria. Public Service International Research Unit (PSIRU).
Hirschman, A. O. (1970). Exit, Voice and Loyalty. Responses to Decline in Firms, Organizations, and States. Cambridge, MA: Harvard University Press.
Hirschman, A.O. (1978). Exit, Voice and the State. World Politics, 31, pp. 90-107.
IUCN (2010). Sharing the Reform Process, Learning from the Phnom Penh Water Supply Authority. International Union for Conservation of Nature and Natural Resources, Bangkok, Thailand.
Jain, A., Ormsbee, L. (2002). Short-term water demand forecast modeling techniques – conventional methods versus AI. Journal of the American Water Resources Association, 94 (7), 64–72.
Jain, A., Varshney, A., Joshi, U. (2001). Short-term water demand forecast modeling at IIT Kanpu using artificial neural networks. Water Resources Management, 15 (5), 299–321.
Jamison, M.A.; Berg, V.S. and Gasmi, F. and Tavara, J.I. (2004). Annotated Reading List for Body of Knowledge on the Regulation of Utility Infrastructure and Services. Florida, USA: Public Utility Research Centre, University of Florida.
Jilke, S., and S. Van De Walle (2013). Two Track Public Services? Citizens’ Voice Behaviour towards Liberalized Services in the EU15. Public Management Review, 15 (4): 465–476.
Jöreskog, K. G. (1970). A General Method for Analysis of Covariance Structure. Biometrika 57 (2): 239–251.
Katz, E. (1997). The Itra-Household Economics of Voice and Exit. Feminist Economics, 3(25-46).
Kaufmann, L. and Lowry, M.N. (2002). Price Cap Regulation of Power Distribution. Madison: Pacific Economics Group.
Khatri, K.B. AND Vairavamoorthy, K. (2007). Challenges for Urban Water Supply and Sanitation in the Developing Countries. Discussion Paper on Urbanization, Delft, Netherlands.
Kim, Y. and Kang, J. (1995). Consumer Perception of Shopping Costs and its Relationship with Retail Trends. Journal of Shopping Research Centre, 2(1), pp. 27-61.
Lowery, D., Hoogland DeHoog. R. and Lyons, W.E. (1992). Citizenship in the Empowered Locality: An Elaboration, A Critique and A Partial Test. Urban AffairsQuarterly, 28 (3), pp.69-103.
Manzi, G., and P. A. Ferrari (2014). Statistical Methods for Evaluating Satisfaction with Public Services. CIRIEC Working Paper. Liège: CIRIEC.
McIntosh, A.C. (2003). Asian Water Supplies, Reaching the Urban Poor. Asian Development Bank, IWA, London.
Meyrick Associates (2002). Electricity Service Quality Incentives Scoping Paper. Prepared for: Queensland Competition Authority, Australia.
Michailidis, G., and J. De Leeuw (1998). The Gifi System of Descriptive Multivariate Analysis. Statistical Science 13: 307–336.
MNI (2006). Accelerating Water Supply and Sanitation for the Urban Poor, East African Regional Conference.
Myers, R. and Lacey, R. (1996). Consumer Satisfaction, Performance and Accountability in the Public Sector. International Review of Administrative Science, 62 (3), pp.331-350.
Myhal, G.C., Kang, J. and Murphy, J.A. (2008). Retaining Customers through Relationship Quality: A Service Business Marketing Case. Journal of Services Marketing, 22(6), pp. 445-53.
O’Brien, R. M., and P. Homer (1987). Corrections for Coarsely Categorized Measures: LISREL’s OECD Countries: Measurement and Highlights. OECD Economics Department Working Paper No. 530. Paris: OECD.
Omonona, B. T. (2009). Knowledge review on poverty and rural development in Nigeria. Strategy Support Program (NSSP). Background Paper. Washington.
Parasuraman, A. and Zeithaml, V. A. and Berry, L. L. (1994). Reassessment of Expectations as a Comparison Standard in Measuring Service Quality: Implications for Further Research. Journal of Marketing, 58, pp. 111-24.
Parasuraman, A. and Zeithaml, V. A. and Berry, L. L. (1988). SERVQUAL: A Multiple-item Scale for Measuring Customer Perceptions of Service Quality. Journal of Retailing, 64(1), 12-40.
Parasuraman, A. and Zeithaml, V. A. and Berry, L.L. (1985). A Conceptual Model of Service Quality and Its Implications for the Future. Journal of Marketing, 49.
Rahmqvist, M., and A. C. Bara (2010). Patient Characteristics and Quality Dimensions Related to Patient Satisfaction. International Journal for Quality in Health Care 22 (2): 86–92.
Rasch, G. (1960). Probabilistic Models for Some Intelligence and Attainment Tests. Copenhagen: The University of Chicago Press.
Ramamurti, R. (1992). Why are Developing Countries Privatizing? Journal of International Business Studies, 23(2), pp. 225.
Renzetti, S. and Dupont, D. (2003). Ownership and Performance of Water Utilities (Comparison of US, UK and French Public Utilities). Greener Management International, 42, pp. 9 -19.
Rogowski, R., ed. (1998). Democracy, Capital, Skill, And Country Size: Effects of Asset Mobility and Regime Monopoly on The Odds of Democratic Rule. Princeton, NJ: Princeton University Press.
Rustichini, Aldo, John Dickhaut, Paolo Ghirardato, Kip Smith, and Jose V. Pardo (2002). A Brain Imaging Study of Procedural Choice. Working Paper, Department of Economics, University of Minnesota.
http://www.econ.umn.edu/˜arust/ProcCh3.pdf.
Salini, S., and R. S. Kenett (2009). Bayesian Networks of Customer Satisfaction Survey Data. Journal of Applied Statistics, 36 (11): 1177–1189.
Sohail, M. and Cavill, S. (2006). Voice in Infrastructure Services. Water, Engineering and Development Centre (WEDC), Loughborough University.
Teas, R.K. (1993). Expectations, Performance Evaluation, and Consumers' Perceptions of Quality. Journal of Marketing, 57, 18-34.
Tenenhaus, M., E. V. Vinzi, Y. M. Chatelin, and C. Lauro (2005). PLS Path Modelling. Computational Statistics & Data Analysis 48: 159–205.
Thampi, G.K. (2005). Experiences with Citizen Report Cards in Bangalore, Community Voice as an Aid to Accountability, 20th August 2005.
United Nations (2012). Responding to the Urban Water Challenge. http://www.un.org/en/development/desa/news/sustainable/water-challenge.html [Accessed 8 October 2012].
WHO/UNICEF (2006). Meeting the MDG Water and Sanitation Target: The Urban and Rural Challenge of the Decade. Switzerland: World Health Organization and UNICEF.
Withey, M.J. and Cooper, W.H. (1989). Predicting Exit, Voice, Loyalty, and Neglect. Administrative Science Quarterly, 34(4), pp. 521.
Wold, H. (1982). Systems under Indirect Observation Using PLS. In A Second Generation of Multivariate Analysis: Methods, edited by C. Fornell, 325–347. New York: Praeger.
Zeithaml, V.A and Bitner, M.J. (2003). Service Marketing: Integrating Customer Focus across the Firm, NY: McGraw-Hill.
Zeithaml, V.A., Parasuraman, A. and Berry, L.L. (1990). Delivering Quality Service: Balancing Customer Perceptions and Expectation. New York: Free Press.
ZeithamlL, V. (1988). A Consumer’s Perceptions of Price, Quality, and Value, Journal of Marketing, 52 (3).?
Andreassen, T.W. and Lindestad, B. (1998). The Impact of Corporate Image in the Formation of Customer Loyalty, Journal of Service Research, 1 (1).
Annoni, P., and R. Brüggemann (2009). Exploring Partial Order of European Countries, Social Indicators Research, 92: 471–487.
Bacchiocchi, E., M. Florio, and M. Gambaro (2011). Telecom Reforms in the EU: Prices and Consumers’ Satisfaction, Telecommunications Policy, 35: 382–396.
Baker, B. and Tremolet, S. (2003). Regulation of Quality: Let competing Firms Offer a Mix of Price and Quality Options, The WorldBank, Washington, DC.
Beresteanu, A. (2003). Nonparametric Estimation of Regression Functions under Restrictions on Partial Derivatives. Working Paper, Department of Economics, Duke University. http://www.econ.duke.edu/˜arie/shape.pdf.
Brudney, J.R. and England, R.E. (1982). Urban Policy Making and Subjective Service Evaluations: Are They Compatible? Public Administration Review, 42, pp.127-35.
Bougadis, J., Adamowski, K., Diduch, R. (2005). Short-term municipal water demand forecasting. Hydrological Processes, 19 (1), 137–148.
Cameron, A. C., and P. K. Trivedi (2005). Microeconometrics, Methods and Applications. Cambridge: Cambridge University Press.
Clarke, R.G. and Wallsten, S. (2003). Universal Service: Empirical Evidence on the Provision of Infrastructure to Rural and Poor Urban Consumers. In: BROOK P.J. AND IRWIN, T.C., ed, Infrastructure for Poor People: Public Policy for Private Provision. Washington, D.C.: World Bank, pp. 21-76.
Clifton, J., and D. D. Díaz-Fuentes (2010). Evaluating EU Policies on Public Services: A Citizens’ Perspective. Annals of Public and Cooperative Economics, 81 (2): 281–311.
Conway, P., and G. Nicoletti (2006). Product Market Regulation in Non-Manufacturing Sectors.
Cronin, J.J. and Taylor, S.A. (1992). Measuring Service Quality: A Reexamination and Extension. Journal of Marketing, 56, 56-68.
Das, B., Chan, E.K., Visoth, C., Pangare, G. and Simpson, R. (2010). Sharing the Reform Process: Learning from the Phnom Penh Water Supply Authority(PPWSA). Gland, Switzerland: IUCN.
Ferrari, P. A., P. Annoni, and G. Manzi (2010). Evaluation and Comparison of European Countries: Public Opinion on Services, Quality & Quantity 44: 1191–1205.
Ferrari, P. A., and A. Barbiero (2011). Nonlinear Principal Component Analysis. In Modern Analysis of Customer Surveys: With Applications Using R, edited by R. S. Kenett and S. Salini, 333–356. Chichester: Wiley.
Fiorio, C. V., and M. Florio (2011). Would You Say That the Price You Pay for Electricity is Fair? Consumers’ Satisfaction and Utility Reforms in the EU15. Energy Economics 33: 178–187.
Fiorio, C. V., M. Florio, S. Salini, and P. A. Ferrari (2007). European Consumers’ Attitudes on Services of General Interest: Accessibility, Price and Quality. Working Paper 2007-04. Milan: DEAS, University of Milan.
Gershuny, J., Bittman, M. and Brice, J. (2005). Exit, Voice and suffering: Do Couples Adapt to Changing Employment Pattern? Journal of Marriage and family,67, pp. 656-65.
Gifi, A. (1990). Nonlinear Multivariate Analysis. New York: Wiley.
Hall, D. (2006). Water and Electricity in Nigeria. Public Service International Research Unit (PSIRU).
Hirschman, A. O. (1970). Exit, Voice and Loyalty. Responses to Decline in Firms, Organizations, and States. Cambridge, MA: Harvard University Press.
Hirschman, A.O. (1978). Exit, Voice and the State. World Politics, 31, pp. 90-107.
IUCN (2010). Sharing the Reform Process, Learning from the Phnom Penh Water Supply Authority. International Union for Conservation of Nature and Natural Resources, Bangkok, Thailand.
Jain, A., Ormsbee, L. (2002). Short-term water demand forecast modeling techniques – conventional methods versus AI. Journal of the American Water Resources Association, 94 (7), 64–72.
Jain, A., Varshney, A., Joshi, U. (2001). Short-term water demand forecast modeling at IIT Kanpu using artificial neural networks. Water Resources Management, 15 (5), 299–321.
Jamison, M.A.; Berg, V.S. and Gasmi, F. and Tavara, J.I. (2004). Annotated Reading List for Body of Knowledge on the Regulation of Utility Infrastructure and Services. Florida, USA: Public Utility Research Centre, University of Florida.
Jilke, S., and S. Van De Walle (2013). Two Track Public Services? Citizens’ Voice Behaviour towards Liberalized Services in the EU15. Public Management Review, 15 (4): 465–476.
Jöreskog, K. G. (1970). A General Method for Analysis of Covariance Structure. Biometrika 57 (2): 239–251.
Katz, E. (1997). The Itra-Household Economics of Voice and Exit. Feminist Economics, 3(25-46).
Kaufmann, L. and Lowry, M.N. (2002). Price Cap Regulation of Power Distribution. Madison: Pacific Economics Group.
Khatri, K.B. AND Vairavamoorthy, K. (2007). Challenges for Urban Water Supply and Sanitation in the Developing Countries. Discussion Paper on Urbanization, Delft, Netherlands.
Kim, Y. and Kang, J. (1995). Consumer Perception of Shopping Costs and its Relationship with Retail Trends. Journal of Shopping Research Centre, 2(1), pp. 27-61.
Lowery, D., Hoogland DeHoog. R. and Lyons, W.E. (1992). Citizenship in the Empowered Locality: An Elaboration, A Critique and A Partial Test. Urban AffairsQuarterly, 28 (3), pp.69-103.
Manzi, G., and P. A. Ferrari (2014). Statistical Methods for Evaluating Satisfaction with Public Services. CIRIEC Working Paper. Liège: CIRIEC.
McIntosh, A.C. (2003). Asian Water Supplies, Reaching the Urban Poor. Asian Development Bank, IWA, London.
Meyrick Associates (2002). Electricity Service Quality Incentives Scoping Paper. Prepared for: Queensland Competition Authority, Australia.
Michailidis, G., and J. De Leeuw (1998). The Gifi System of Descriptive Multivariate Analysis. Statistical Science 13: 307–336.
MNI (2006). Accelerating Water Supply and Sanitation for the Urban Poor, East African Regional Conference.
Myers, R. and Lacey, R. (1996). Consumer Satisfaction, Performance and Accountability in the Public Sector. International Review of Administrative Science, 62 (3), pp.331-350.
Myhal, G.C., Kang, J. and Murphy, J.A. (2008). Retaining Customers through Relationship Quality: A Service Business Marketing Case. Journal of Services Marketing, 22(6), pp. 445-53.
O’Brien, R. M., and P. Homer (1987). Corrections for Coarsely Categorized Measures: LISREL’s OECD Countries: Measurement and Highlights. OECD Economics Department Working Paper No. 530. Paris: OECD.
Omonona, B. T. (2009). Knowledge review on poverty and rural development in Nigeria. Strategy Support Program (NSSP). Background Paper. Washington.
Parasuraman, A. and Zeithaml, V. A. and Berry, L. L. (1994). Reassessment of Expectations as a Comparison Standard in Measuring Service Quality: Implications for Further Research. Journal of Marketing, 58, pp. 111-24.
Parasuraman, A. and Zeithaml, V. A. and Berry, L. L. (1988). SERVQUAL: A Multiple-item Scale for Measuring Customer Perceptions of Service Quality. Journal of Retailing, 64(1), 12-40.
Parasuraman, A. and Zeithaml, V. A. and Berry, L.L. (1985). A Conceptual Model of Service Quality and Its Implications for the Future. Journal of Marketing, 49.
Rahmqvist, M., and A. C. Bara (2010). Patient Characteristics and Quality Dimensions Related to Patient Satisfaction. International Journal for Quality in Health Care 22 (2): 86–92.
Rasch, G. (1960). Probabilistic Models for Some Intelligence and Attainment Tests. Copenhagen: The University of Chicago Press.
Ramamurti, R. (1992). Why are Developing Countries Privatizing? Journal of International Business Studies, 23(2), pp. 225.
Renzetti, S. and Dupont, D. (2003). Ownership and Performance of Water Utilities (Comparison of US, UK and French Public Utilities). Greener Management International, 42, pp. 9 -19.
Rogowski, R., ed. (1998). Democracy, Capital, Skill, And Country Size: Effects of Asset Mobility and Regime Monopoly on The Odds of Democratic Rule. Princeton, NJ: Princeton University Press.
Rustichini, Aldo, John Dickhaut, Paolo Ghirardato, Kip Smith, and Jose V. Pardo (2002). A Brain Imaging Study of Procedural Choice. Working Paper, Department of Economics, University of Minnesota.
http://www.econ.umn.edu/˜arust/ProcCh3.pdf.
Salini, S., and R. S. Kenett (2009). Bayesian Networks of Customer Satisfaction Survey Data. Journal of Applied Statistics, 36 (11): 1177–1189.
Sohail, M. and Cavill, S. (2006). Voice in Infrastructure Services. Water, Engineering and Development Centre (WEDC), Loughborough University.
Teas, R.K. (1993). Expectations, Performance Evaluation, and Consumers' Perceptions of Quality. Journal of Marketing, 57, 18-34.
Tenenhaus, M., E. V. Vinzi, Y. M. Chatelin, and C. Lauro (2005). PLS Path Modelling. Computational Statistics & Data Analysis 48: 159–205.
Thampi, G.K. (2005). Experiences with Citizen Report Cards in Bangalore, Community Voice as an Aid to Accountability, 20th August 2005.
United Nations (2012). Responding to the Urban Water Challenge. http://www.un.org/en/development/desa/news/sustainable/water-challenge.html [Accessed 8 October 2012].
WHO/UNICEF (2006). Meeting the MDG Water and Sanitation Target: The Urban and Rural Challenge of the Decade. Switzerland: World Health Organization and UNICEF.
Withey, M.J. and Cooper, W.H. (1989). Predicting Exit, Voice, Loyalty, and Neglect. Administrative Science Quarterly, 34(4), pp. 521.
Wold, H. (1982). Systems under Indirect Observation Using PLS. In A Second Generation of Multivariate Analysis: Methods, edited by C. Fornell, 325–347. New York: Praeger.
Zeithaml, V.A and Bitner, M.J. (2003). Service Marketing: Integrating Customer Focus across the Firm, NY: McGraw-Hill.
Zeithaml, V.A., Parasuraman, A. and Berry, L.L. (1990). Delivering Quality Service: Balancing Customer Perceptions and Expectation. New York: Free Press.
ZeithamlL, V. (1988). A Consumer’s Perceptions of Price, Quality, and Value, Journal of Marketing, 52 (3).?