AE Research Focus 2016

It’s hard to believe that we’re at the end of 2015 and preparing for 2016. This year went by so quickly, and I don’t think we’re alone in this feeling. Many of our clients and peers have said the same. But here we are. It’s December 22, 2015 and we’re about to go on a very short break for the holidays. When we get back, it will be 2016 and we’ll be off and running again.

The year 2016 promises to be an interesting year for us here at Antilles Economics. As I’ve mentioned in other posts (see here and here), we research for both our clients and ourselves. The Green Economy continues to be one of our core research areas. We believe that greening has the potential to transform the Barbadian economy by enhancing competitiveness and supporting the formation of new areas of activity within traditional industries such as manufacturing, tourism and energy. In 2015, we were a major contributor to the Caribbean Electric Vehicle Expo and Conference, which investigated the potential economic and environmental benefits of the greater utilization of electric and hybrid vehicles in Barbados. In 2016, we will continue to focus on niches within the Green Economy and invite our stakeholders – companies, government entities and other interested parties – to contact us if you have any suggestions on which niches we should prioritise.

Another area of interest is the consumer market. We started this work in 2015 with the survey we conducted on Customer Experience in conjunction with brand development firm, Blueprint Creative Inc. This survey uncovered a number of insights about how consumers respond to positive and negative customer experiences, and how they share their experiences with others. We will continue our work to understand the Caribbean consumer and the impact of branding in 2016. We also recently published a short article looking at the trends in consumer spending pre- and post-slump in Barbados. If the trends we’ve observed continue, 2016 could be one of the strongest years for consumer goods and retail companies since the economic slowdown started in 2008. But all segments will not benefit equally, and we intend to delve deeper into these differences in the coming year.

Our final area of focus for our internal research in 2016 will look at demographic and societal change in the Caribbean and the implication for economic development and how business is conducted going forward. Whether through elevated rates of emigration or the emergence of new cities and residential hubs, the movement of people within the Caribbean is changing how business is being conducted. The traditional national boundaries of markets are increasingly becoming challenged and once efficient distribution networks are starting to seem obsolete. Understanding these changes will feature highly on our 2016 research agenda.

If you missed any of our 2015 articles, our roundup of the last year of research articles is noted below:

AE Research Methods

From time to time, we are asked for details about the research methods we use when uncovering insights. This is a tough question since we use so many, and the method ultimately used in a project depends on the data and the topic being investigated.

Generally, we use both primary and secondary data collection methods, and a wide range of statistical analysis techniques. For example, we have used surveys and statistical analysis to collect information on and analyse the impact of a change in legislation on the demand for medicines (click here to read about it); and we have used secondary information and linear regression to forecast premiums and claims in the insurance industry (click here to read more). In both cases, we adapted our approach to suit the question we were investigating.

To learn more about other methods we use, click here to read our 2015 Research Methods summary. The methods outlined in this document are not by any means the full list of our tools. If you would like more information, click here to send us your query.

The Recovery of Consumer Spending

The Barbados economy appears to be emerging from a prolonged economic slump, fueled mostly by personal consumption. In large measure, funding challenges appear to explain the contraction in consumer spending experienced throughout the downturn, and the shift from purchasing non-essential items (such as vehicles) to purchasing essential items (such as food) over the last 7 years. The year 2015, however, may turn out to be a pivotal year, as all sources of funding appear to be on the rise. This is positive news for consumer goods and retail businesses, as 2015 could mark the return of at least moderate growth in consumer spending.

Read more about the Recovery of Consumer Spending here

To learn more about how Antilles Economics monitors economic and industry developments, click here to learn more about our Dashboards.

AE Impact Story: Relationship Between Imports and Production/Sales of Poultry Products

Aim of Project

The production of poultry meat is one of the largest areas of agriculture production in Barbados. In 2013, just over 13 million kilograms of chicken meat was produced, more than twice the amount of pork, beef, veal, mutton and turkey combined. The local chicken market is protected from significant competition from imported chicken since importing poultry is only permitted under special circumstances.

The goal of this project was to investigate the link between the imports of poultry, local production/sales and market prices.

What We Did

We employed a number of statistical techniques to investigate the relationship between poultry imports and various indicators of the performance of the domestic poultry industry. In addition to poultry imports, we also identified the other potential determinants of local production and sales of poultry.

The results of the analysis indicated that due to the relatively small amount of imports, there was little to no association between imports and domestic production/sales of poultry in Barbados. Instead, key supply-side determinants played a pivotal role, including the production of other meats and the price of poultry products.

Impact of Project

The results were used to help inform import and competition policies in the local poultry industry. 

Employing Metrics in HR Management

Human resources are considered vital to organisational strategy and a leading determinant of business success. However, finding organisations that measure and directly link their human resource investments to strategic goals is challenging. To overcome this challenge, talent management executives must speak the same language as other executives: numbers.

In this brief article, Anna Kay Seaton offers a brief glimpse into the current state of metrics usage in talent management. Ms. Seaton is the Lead Consultant, Coach and Trainer at People Engagement and Research Solutions, and has worked in talent management for seventeen years. She advises that to establish a commitment to utlising HR metrics within your organisation, HR professionals and other executives should establish priority areas for competitive advantage and align talent management strategies accordingly. HR metrics should then be designed to effectively track progress towards the organisation’s objectives.

Click here to read Employing Metrics in HR Management.

AE Impact Story: Modelling the Stability of the Barbadian Financial System

Aim of the Project

The financial system is one of the most important parts of an economy, governing all movements of capital between agents. It also provides useful indicators of the health of an economy and various groups such as government entities, private companies and individuals. Many observers of any economy will therefore pay close attention to developments that could affect the stability of the financial system.

Antilles Economics was engaged by an international body to develop a model of the financial system of Barbados and to conduct an analysis of its stability.

What We Did

This project required a number of modelling techniques, including both regression analysis and statistical analysis. The first step was to build a model that accurately captured the linkages between financial agents and the rest of the economy as well as between financial agents.

We then assessed whether various stakeholders in the economy were responding to legislative changes, economic developments, internal decisions or some combination of these.

Finally, we estimated the extent of the shock that would be required to cause the financial system to fail. We considered three types of shocks: those originating from outside of Barbados; those originating from within Barbados, but outside of the financial system; and, those originating from within the financial system itself.

Impact of the Project

The resulting model and analysis was used by our client to strengthen their surveillance of Barbados. It was also used to help our client determine what additional support it could provide to the Government of Barbados.

When To Use Telephone Surveys

Today I received a phone call from a research agency inviting me to participate in a customer satisfaction survey for a financial institution. Since I’ve been on the other end of those calls, I tend to be very cooperative; after all, they usually only take a couple of minutes. After the telephone survey was completed, I went back to work developing an online survey for one of our clients. I started wondering if companies actively chose to use telephone surveys or if it was the default option because it was the most popular method in Barbados. Just in case it was the latter, I decided to write this short post outlining the circumstances under which we advise clients to use telephone surveys. Just for clarity, when we speak of telephone surveys, we are not including polls via SMS or participants accessing an online survey using their smartphone. We are speaking only of surveys completed using phone calls.

Telephone surveys are best used under the following circumstances:

  • Your target market is available by telephone and willing to talk to you during the hours that you intend to conduct the survey;
  • Your questionnaire is very short and does not have any visuals; and,
  • You have a reasonable length of time and the budget to conduct the survey.

Your target market is available by telephone and willing to talk to you during the hours that you intend to conduct the survey

Let’s face it; most people are not home during normal working hours. They’re at work; so unless you intend to call them at work, you will probably struggle to meet your response rate. The obvious workaround would be to call after they reach home. But who has time to talk to you when they’re making dinner, overseeing their kids’ homework or trying to de-stress from a long day at work? And that’s assuming that they actually go straight home after work. These days it is very common for people go to the gym or run errands after work. Or, maybe your research team is not in a position to work outside of regular working hours, what happens then?

The other challenge comes when you do reach people during typical working hours: figuring out if the results you get actually reflect the views of your target market. In Barbados, most of the people that are home during regular working hours are either retired, unemployed, don’t work or are on vacation/sick leave. Only a very small percentage is likely to be in the last category. Those in the first three categories will probably exhibit certain characteristics that do not represent the majority. As a simple example, there are studies that show that the older we get, the less likely we are to be willing to change. So, if you ask these people if they are considering moving their business to a competitor, they will probably say no, even if they are not satisfied with your product or service. This could lead to the assumption when you get the survey report that your customers are more loyal than they really are. We could also consider the example of asking an unemployed person about the likelihood of them purchasing a particular good in the near future, or asking someone that does not work about traffic congestion in the morning. Odds are the results you get would not necessarily reflect the true opinions of your target market.

Your questionnaire is very short and does not have any visuals

I always advise that clients limit the number of questions in a survey and try to make them as easy to complete as possible, regardless of survey method. When conducting telephone interviews, this becomes even more critical. Whichever distribution method you choose, you are asking respondents to take a few minutes out of their busy schedule to complete your survey. But for some reason, over the telephone, people appear to be even busier, and it becomes even more critical that you respect their time. If they start to get impatient with the length of the survey they will start to mentally tune out and not give each question the attention it deserves, with obvious implications for the quality of the insights you gather.

Telephone surveys also tend to limit the researcher to questions that require the respondent to only listen. We therefore lose the ability to test their responses to visuals, sounds, scents or the way something feels. This probably works fine for your basic customer satisfaction or brand loyalty survey, but is obviously very limiting if your survey is designed to support product development, a marketing campaign or the development of a brand.

You have a reasonable length of time and the necessary budget to conduct the survey

This point is related to survey administration. When conducting surveys via telephone, it can take a long time to reach your target number of respondents. This is mainly because many of your calls will go unanswered. We always suggest when doing telephone surveys to expect it to take double to triple the amount of time it would have if you actually reached respondents on the first try. Or, if you really have a long research timeline, you could ask them to expect your call at a certain time on a certain day so they make themselves available.

Finally, telephone surveys are fairly expensive since you have to budget for the telecommunication costs as well as the time lost making unanswered calls. Though research firms will charge you a flat rate, rather than a fee per call, they have to budget for these elements, and they risk losing money if it takes longer than they expected to meet the required response rate.

 

The ease of conduct is probably the main reason why telephone surveys are one of the most popular methods in Barbados. When designing your next telephone survey, bear in mind these few suggestions to ensure that your research exercise uncovers the most revealing insights possible.

 

 

Information Gaps Limiting Investing

The Barbadian financial market has not always behaved as theory would suggest, especially when considering most investment products. For example, fixed income investments holdings decrease when theory suggests that they should increase; the volume of stock market trading may have a stronger tie to the attractiveness of the market generally rather than economic activity; and, the mutual fund market is heavily influenced by government incentives.

One theory explaining the disconnect between investment theory and observed market trends in Barbados could be that insufficient information results in suboptimal wealth allocation. Our research uncovered four information gaps that influence potential investors’ demand for investment products:

  • Limited understanding of features of financial instruments;
  • Limited information on all features of financial instruments;
  • Lack of trust in financial institutions; and,
  • The inability to comfortably asses risk and return.

These gaps lead to dissatisfaction with local investment options, apprehensive and risk-averse attitudes to investing, and a lack of trust in financial institutions. Combined, they result in an overall low appetite for investing in Barbados. To stimulate potential investors’ appetites, financial institutions must repair existing information gaps by ensuring that their investment information is easy to understand, comprehensive and clearly communicated, thus building confidence in their organisation and investing generally.

To read the entire article, click here .