Marketing Letters

, Volume 17, Issue 2, pp 137–149

An empirical comparison of methods for measuring consumers’ willingness to pay

Article

DOI: 10.1007/s11002-006-5147-x

Cite this article as:
Voelckner, F. Market Lett (2006) 17: 137. doi:10.1007/s11002-006-5147-x

Abstract

A valid procedure for measuring consumers’ willingness to pay (WTP) is crucial in designing optimal pricing policies or for estimating demand for new products. Understanding potential sources of differences in WTP estimates that emerge from value elicitation studies constitutes an important step in research on how managers should estimate consumers’ WTP. This research presents an empirical analysis of two potential sources of differences and discusses possible means of mitigating them. We find substantial and significant differences between the WTP reported by subjects when payment of the stated price is real or hypothetical. Notwithstanding the dichotomy between real and hypothetical WTP, we find significant differences among the WTP estimates of a broad range of value elicitation methods.

Keywords

Willingness to pay (WTP)Measuring willingness to payPricing

Copyright information

© Springer Science + Business Media, Inc. 2006

Authors and Affiliations

  1. 1.Institute of Marketing and RetailingUniversity of HamburgHamburgGermany