SAS Business AnalyticsSingapore Conference 2011
How to Get More Out of Your Data
Using Structural Equation Models?
Tan Teck KiangNanyang Technological University
25 May 2011, 15:00-15:30The Fullerton Hotel
Content
• Another Mining Tool - Structural Equation Model
• What is SEM?• Areas of Application• Examples– Tourist Royalty– Airline Services
• References
Mining Tools – Enterprise Miner
• Decision Tree• Cluster Analysis• Logistic Regression• Neural network• ……
• Structural Equation Model ?
PROC CALIS
SAS/STAT
What is SEM?
• SEM model translates a series of cause-effect variables into a composite model that describes the relationships of these variables and show the extent of these relationships.
Areas of Application for SEM
• Business research– Marketing, Management, Economics, Organization
• Survey Research • Behavioral and Social Sciences
– Psychology, Sociology, Psychiatry, Criminal Science, Family Studies, Political Science, Developmental Research, and Social Work
• Medical Research– Nursing, Pharmacy, Epidemiology, and Sport Science
• Environmental Science• Education
– Student Achievement, Policy Studies, and Counseling • Longitudinal Study
Airline Services
• How price, airline service quality, value, passenger satisfaction and airline image determine passengers’ future behavioral intentions?
Airline Services
Source: Park, J.-W., Robertson, R., and Wu, C.-L. (2006). Modeling the impact of airline service quality and marketing variables on passengers’ future behavioural intentions, Transportation Planning and Technology, 29(5), 359-381.
Determine Relationships
Source: Park, J.-W., Robertson, R., and Wu, C.-L. (2006). Modeling the impact of airline service quality and marketing variables on passengers’ future behavioural intentions, Transportation Planning and Technology, 29(5), 359-381.
-ve
-ve +ve
-ve
Airline Services
Source: Park, J.-W., Robertson, R., and Wu, C.-L. (2006). Modeling the impact of airline service quality and marketing variables on passengers’ future behavioural intentions, Transportation Planning and Technology, 29(5), 359-381.
-ve
+ve
+ve
+ve
Tourist Royalty
• Benefits of maintaining a solid base of loyal customers.
• SEM helps tourism managers to develop and implement effective relationship marketing strategies.
• Examining interrelationships among image, quality, satisfaction, trust and the tourists’ behavior variables.
Source: Loureiro and Gonzalez (2008). The importance of quality, satisfaction, trust, and image in relation to rural tourist loyalty, Journal of Travel and Tourism Marketing, V 25(2), 117-136.
Satisfaction
Loyalty
Quality
Trust
Image
Tourist Royalty
MeasurementModel
StructureModel+
How to measure Loyalty and Quality?
Specify the relationship of Loyalty and Quality.
Source: Loureiro and Gonzalez (2008). The importance of quality, satisfaction, trust, and image in relation to rural tourist loyalty, Journal of Travel and Tourism Marketing, V 25(2), 117-136.
QualityThe lodging facilities and rooms are cleanThe lodging employees have a clean and neat appearanceThe clients are treated cordially and affably.The lodging employees know the functions that they carry out.The lodging foods are well presented and flavorful.
LoyaltyI will speak well about this lodging service to other peopleI will recommend the lodging if someone ask for my adviseI will encourage my friends and relatives to visit this lodgingIn the next vacation I intend to return to this lodgingI would come continually even if the lodging price will increase
Measurement Model
Quality
FacilitiesClean
EmployeeNeat
Treated Cordially
Employees Know
Functions
FoodFlavorful
Source: Loureiro and Gonzalez (2008). The importance of quality, satisfaction, trust, and image in relation to rural tourist loyalty, Journal of Travel and Tourism Marketing, V 25(2), 117-136.
Satisfaction
Loyalty
Quality
Trust
Image
Structure Model
Source: Loureiro and Gonzalez (2008). The importance of quality, satisfaction, trust, and image in relation to rural tourist loyalty, Journal of Travel and Tourism Marketing, V 25(2), 117-136.
Satisfaction
Loyalty
Quality
Trust
Image
0.46
0.04
0.23
0.27
Structure Model
Source: Loureiro and Gonzalez (2008). The importance of quality, satisfaction, trust, and image in relation to rural tourist loyalty, Journal of Travel and Tourism Marketing, V 25(2), 117-136.
Satisfaction
Loyalty
Quality
Trust
Image
0.46
0.04
0.23
0.27
0.52 Direct Effect
Source: Loureiro and Gonzalez (2008). The importance of quality, satisfaction, trust, and image in relation to rural tourist loyalty, Journal of Travel and Tourism Marketing, V 25(2), 117-136.
Satisfaction
Loyalty
Quality
Trust
Image
0.46
0.04
0.23
0.27
0.52 Direct Effect
Indirect Effect
Indirect Effect = 0.52 x 0.46 = 0.24Total Effect = 0.04 + 0.24 = 0.28
Source: Loureiro and Gonzalez (2008). The importance of quality, satisfaction, trust, and image in relation to rural tourist loyalty, Journal of Travel and Tourism Marketing, V 25(2), 117-136.
Satisfaction
Loyalty
Quality
Trust
Image
0.46
0.04
0.23
0.27
0.52
0.76
0.41
0.77
0.14
Indirect Effect (1)
Source: Loureiro and Gonzalez (2008). The importance of quality, satisfaction, trust, and image in relation to rural tourist loyalty, Journal of Travel and Tourism Marketing, V 25(2), 117-136.
Satisfaction
Loyalty
Quality
Trust
Image
0.46
0.04
0.23
0.27
0.52
0.76
0.41
0.77
0.14
Indirect Effect (2)
Source: Loureiro and Gonzalez (2008). The importance of quality, satisfaction, trust, and image in relation to rural tourist loyalty, Journal of Travel and Tourism Marketing, V 25(2), 117-136.
Satisfaction
Loyalty
Quality
Trust
Image
0.46
0.04
0.23
0.27
0.52
0.76
0.41
0.77
0.14
Indirect Effect (3)
Source: Loureiro and Gonzalez (2008). The importance of quality, satisfaction, trust, and image in relation to rural tourist loyalty, Journal of Travel and Tourism Marketing, V 25(2), 117-136.
Satisfaction
Loyalty
Quality
Trust
Image
0.46
0.04
0.23
0.27
0.52
0.76
0.41
0.77
0.14
Indirect Effect (4)
Source: Loureiro and Gonzalez (2008). The importance of quality, satisfaction, trust, and image in relation to rural tourist loyalty, Journal of Travel and Tourism Marketing, V 25(2), 117-136.
Satisfaction
Loyalty
Quality
Trust
Image
0.46
0.04
0.23
0.27
0.52
0.76
0.41
0.77
0.14
Indirect Effect (5)
Source: Loureiro and Gonzalez (2008). The importance of quality, satisfaction, trust, and image in relation to rural tourist loyalty, Journal of Travel and Tourism Marketing, V 25(2), 117-136.
Satisfaction
Loyalty
Quality
Trust
Image
0.46
0.04
0.23
0.27
0.52
0.76
0.41
0.77
0.14
R2 0.86
Back to Airline Services
Airline Services
Source: Park, J.-W., Robertson, R., and Wu, C.-L. (2006). Modeling the impact of airline service quality and marketing variables on passengers’ future behavioural intentions, Transportation Planning and Technology, 29(5), 359-381.
0.42
0.42
0.21
-0.08
0.11
n.s.
0.53
0.290.59
0.640.18
n.s.
n.s.
R2 0.78
Airline Services – Satisfaction
Source: Park, J.-W., Robertson, R., and Wu, C.-L. (2006). Modeling the impact of airline service quality and marketing variables on passengers’ future behavioural intentions, Transportation Planning and Technology, 29(5), 359-381.
0.42
0.420.64
0.290.59
Passenger Satisfaction
• Passenger satisfaction had a significant effect on airline image and passengers’ behavioral intentions.
• Passenger satisfaction depend on service quality and passengers’ value perceptions.
Proc Calis Data = Airline;PathIntentions <--- Satisfaction,Intentions <--- Price,Intentions <--- Value,Intentions <--- Image,…
Value <--- Price,Value <--- Quality;Run;
Summary
• SEM – About cause and effect relationships– Quantify the extent
• Likely Effects and their Impacts – Examine likely consequences if one of the factors
turn as unexpected – Decision Making (Scenario Analysis)
• SAS Syntax
References
• Kumar et al (2007). The association of consumer expectations, experiences and satisfaction with newly prescribed medications. Quality of Life Research, 16, 1127-1136.
• Park, J.-W., Robertson, R., and Wu, C.-L. (2006). Modeling the impact of airline service quality and marketing variables on passengers’ future behavioural intentions, Transportation Planning and Technology, 29(5), 359-381.
Thank You
Eng 01
InitialPerformance
Growth inPerformance
Eng 02 Eng 03 Eng 04 Eng 05 Eng 06 Eng 07
Gender
Parent
StudentEmotionalProblem
Education – Longitudinal Study
Airline Services
Source: Park, J.-W., Robertson, R., and Wu, C.-L. (2006). Modeling the impact of airline service quality and marketing variables on passengers’ future behavioural intentions, Transportation Planning and Technology, 29(5), 359-381.
-ve
+ve
+ve
+ve
Airline Services
Source: Park, J.-W., Robertson, R., and Wu, C.-L. (2006). Modeling the impact of airline service quality and marketing variables on passengers’ future behavioural intentions, Transportation Planning and Technology, 29(5), 359-381.
0.42
0.42
0.21
-0.08
Airline Services – Service Quality
Source: Park, J.-W., Robertson, R., and Wu, C.-L. (2006). Modeling the impact of airline service quality and marketing variables on passengers’ future behavioural intentions, Transportation Planning and Technology, 29(5), 359-381.
0.42
0.42
0.21
0.53
0.290.59
0.64
Airline Services Quality
• Service quality is a driver of passenger satisfaction and perceived value.
• Airlines should strive to develop strategies for improving service quality.