Let’s face it: during the holiday season you’re going to buy a lot of stuff. And some of that stuff you’re going to regret buying. Welcome to “buyer’s remorse” (or as some researchers call it, “post-purchase regret”).
Buyer’s remorse can be a problem in business because you’ll probably return some of that stuff you regret buying. That’s lost profits. So what causes buyer’s remorse and what can a business do to reduce it?
4 Causes of Buyer’s Remorse:
As a business owner, you want to increase sales but you also don’t want returns. So which of these 4 factors should you try to address? All of them? Just a few?
That’s where the statistical technique of multiple regression can help. Multiple regression helps us decide which, among many factors relating to our variable of interest (in this case, a sense of regret) has the strongest relationship.
Researchers created a questionnaire and gave it to 120 people, asking them about recent purchases. It also measured their level of regret about those purchases using a 22 item aptly named, “Cognitive Dissonance Immediately After Purchase” scale, which has questions like these;
“After I bought this product, I:
So: using the above 4 factors (and 2 others - consumer involvement and expectation) researchers were able to determine that concerns over the price you paid has the strongest relationship to buyer’s remorse.
Hopefully, this post will help students realize that multiple regression is actually a very useful tool. You could begin a class discussion by listing on the board students' answers to these questions:
Next, you could quickly get students into groups and ask them to rank order the reasons they gave for their buyer's remorse. You'll probably get different ranks from different groups. So how do we find out which of all these reasons leads to the greatest sense of regret? Answer: multiple regression.
Source: Investigating into factors accounting for cognitive dissonance (Post purchase regrets). Amoah Armstrong, Nusrat-Jahan Abubakar, Isaiah Sikayena. International Journal of Multidisciplinary Research and Development (2017).
Looking for more examples to help students appreciate the uses of multiple regression? Check out the Multiple Regression chapter of your Cengage MindTap course and find the “Microsoft Excel: Structured Activity”. Your students can download an excel sheet and run regressions on example data.