Paired_Comparison_Analysis

PAIRED COMPARISON ANALYSIS 1. BACKGROUND “Paired Comparison Analysis “is based on the law of comparative judgment which was conceived by L L.Thurstone ( An American engineer –cum- psychologist ) in 1927. Thurstone have a lot of contribution in the fields of test theory, psychophysics, measurement of attitudes and the study of human intelligence. Perhaps his best-known input was the development of multiple-factor analysis (an approach for determining the number and nature of unobserved constructs giving rise to relationships among observed variables). 2. INTRODUCTION Paired comparison analysis is also known as “Paired Choice Analysis”. In modern day terminology, it is more aptly described as a model that is used to obtain weights of objects and comparisons of the extremity of an attitude expressed within statements. It is a decision making tool and generally refers to any process of comparing entities in pairs to judge which of each pair is preferred or has a greater amount of some quantitative property. The method is widely used in the study of preferences, attitudes, voting system, social /public choices and can be conducted individually or in groups. 3. DEFINITION “It is defined as a good way of weighting up the relative importance of available options”. OR “It is defined as a process in which a range of plausible option is listed ,each option is compared against each of the other options, determining the preferred option in each case, results are then tallied with each other to find an overall winner(Or the option with the highest score is preferred as a viable option or is declared as a preferred option)” 4. PROCESS OF PAIRED COMPARISON ANALYSIS (Steps to conduct the Paired Comparison Analysis) The steps given are followed for using this technique: STEP-I List the options you will compare. Assign a letter (A, B, C, D, and so on) to each option. STEP-II Mark the options as rows and columns headings on the work sheet. STEP-III Note that the cells on the table where you will be comparing an option with itself will be blocked out mean there will never be a difference in these cells. STEP-IV The cells on the table where you will be duplicating a comparison will also blocked out. STEP-V Within the remaining cells compare the option in the row with the one in the column. For each cell, decide which of the two options is more important ,write down the letter of the more important option in the cell and score the difference in importance from 0 to 3. LEGEND 0 = NO DIFFERENCE 1 = SLIGHTLY PREFER / DIFFERENCE 2 = MODERATELY PREFER / DIFFERENCE 3 = GREATLY PREFER / DIFFERENCE STEP-VI Finally consolidate the result by adding up the total of all the values for each of the options. you can also convert these values into a percentage(%) of the total score. 5.DEMONSTRATION BY AN EXAMPLE Mr. Adnan Khawaja an entrepreneur and the CEO of his own domestic / private airline “SILK WAYS” is looking at the ways in which he can expand and enhance his business. He uses “ PAIRED COMPARISON ANALYSIS TECHNIQUE” to evaluate the best option for his business expansion /investment .He list down his options and assigns them the letters A,B,C and D to each option as given below :- • Expand and invest into overseas market (A) OPTION 1 • Expand and invest in home market (B) OPTION 2 • Improve customer service (C) OPTION 3 • Improve quality (D) OPTION 4 He then draws the Paired Comparison Analysis table as follows :- PAIRED COMPARISON ANALYSIS TABLE Options Overseas market (A) Home market (B) Customer service (C) Quality (D) Overseas market (A) STEP-3 Home market (B) STEP-4 STEP-3 Customer service (C) STEP-4 STEP-4 STEP-3 Quality (D) STEP-4 STEP-4 STEP-4 STEP-3 Following this technique he compares options and writes down the letter of most important option and scores their difference in importance. How he does, that is shown in the figure below :- PAIRED COMPARISON ANALYSIS TABLE Options Overseas market (A) Home market (B) Customer service (C) Quality (D) Overseas market (A) STEP-3 A,2 C,1 A ,1 Home market (B) STEP-4 STEP-3 C ,1 B ,1 Customer service (C) STEP-4 STEP-4 STEP-3 C ,2 Quality (D) STEP-4 STEP-4 STEP-4 STEP-3 Finally he add up the A,B,C,D values and convert each into a percentage of the total as follows: Options Total Total in percentage(%) Ranking of options A 3 3/8 *100=37.5% C B 1 1/8 *100=12.5% A C 4 4/8 *100=50% B D 0 0/8 *100=0 % D TOTAL 8 6. FINDINGS As per the result above Mr. Adnan have reached on the conclusion that he should first improve his customer service option (C), then to tackle international market option (A).Quality option (D) need not to be addressed right now —perhaps it is good already. 7. ADVANTAGES /DISADVANTAGES OF PAIRED COMPARISON ANALYSIS a.ADVANTAGES I. Paired comparison analysis helps to work out the improtance of a number of options relative to each other. II. Particularly it is useful where no statistical or objective data is available for deciding about the best option. III. Paired comparison analysis helps to set priorities where they are not clear or are competing in importance. IV. It provides a framework for comparing each course of action against all others and helps to show the difference in importance between factors. V. It is also can ideal tool for comparing “apples with oranges” that is completely different options such as weather to invest in marketing or in a new IT system or a new piece of machinery. b.DISADVANTAGES Some objections to the use of this analysis include the observation that this approach cannot be used to determine the true difference or real discrimination between samples/options. It is suggested that this approach should be used only for measuring quality judgments or in preference tests. 8. QUESTION/ANSWER SESSION ' ' ' 9. CONCLUSION To conclude we can say that paired comparison analysis is useful tool for project managers and project teams as a source of prioritizing the issues ,factors and courses of action within a single project or among multiple projects, especially when these items are difficult to evaluate using an objective scheme. SOME THING ABOUT L L THURSTONE Louis Leon Thurstone was a U.S. pioneer in the fields of psychometrics and psychophysics. He conceived the approach to measurement known as the law of comparative judgment, and is well known for his contributions to factor analysis. Louis Leon Thurstone was born in Chicago, Illinois to Swedish immigrant parents. Thurstone originally received a masters in Mechanical Engineering from Cornell University in 1912. Thurstone was offered a brief assistantship in the laboratory of Thomas Edison. In 1914, after two years as an instructor of geometry and drafting at the University of Minnesota, he enrolled as a graduate student in psychology at the University of Chicago (PhD. 1917). He later returned to the University of Chicago (1924–1952) where he taught and conducted research. In 1952, he established the L. L. Thurstone Psychometric Laboratory at the University of North Carolina at Chapel Hill. Factor analysis and work on intelligence Thurstone was responsible for the standardized mean and standard deviation of IQ scores used today, as opposed to the Intelligence Test system originally used by Alfred Binet. He is also known for the development of the Thurstone scale.