Propensity Customer the Proposition of Lawsuits: Development and test of Predictive Model for the Electricity Sector

Abstract

The study aimed to propose and test a model to predict the propensity of lawsuits of Power sector utility customers. The effects of customer profile, motives of complaints, and the history of administrative actions, on the propensity to lawsuits, were investigated. The paradigm of disconfirmation of expectations was used as a theoretical framework for this study. We adopted a substantive approach to the development and testing of the predictive model. The technique of Classification Tree was chosen to operationalize the model. The method specified in this study for the creation of the decision tree was the CHAID (Chi Square Interaction Detector). Data analysis shows that the propensity to the proposition of a lawsuit does not solely depend on the nature of the problem faced by the client, but the profile and trajectory relationship with the utility provider. The results of this study offer empirical support to the theoretical paradigm of disconfirmation of expectations, more specifically, with regard to the Satisfaction Theory, Attribution Theory and the Theory of Justice and Equity. The main managerial contribution of the study lies in propose a predictive model that allows utility providers to assign each customer a probability to propose a lawsuit, which enables the proactive adoption of practices by the managers, aiming to better serve the public.