Quantitative Marketing and Economics

, Volume 15, Issue 4, pp 305–339 | Cite as

Do consumers value price transparency?

  • Katja Seim
  • Maria Ana VitorinoEmail author
  • David M. Muir


We examine the role of price transparency in consumer preferences and demand. We assemble a detailed dataset on the driving school industry in Portugal to quantify how firms present the price of the course of instruction, and its individual components, to potential students. Our unique data allows us to estimate a structural model of school choice and measure the impact of varying levels of price information on demand. The results show that consumers are willing to pay a significant amount for price transparency, on average 11% of the service price, and that consumer demographics drive heterogeneous preferences for transparency.


Pricing Transparency Information Consumer valuation 

JEL Classification

D43 D83 L13 L15 L84 



We thank Susana Paulino at Instituto da Mobilidade e dos Transportes for access to the data and information about the industry. Ana Isabel Horta provided excellent research assistance, and Susana Belo assisted with local data collection. We thank Elisabeth Honka, JF Houde, and Yi-Lin Tsai for fruitful conversations throughout the writing of this paper and the co-editor Sanjog Misra and two anonymous reviewers for valuable comments. We also thank the seminar participants at the Alfred Lerner College of Business and Economics (The University of Delaware), Carlson School of Management (University of Minnesota), Foster School of Business (University of Washington), LeBow College of Business (Drexel University), Sauder School of Business (University of British Columbia), Stern School of Business (New York University), and Wharton School (University of Pennsylvania). We gratefully acknowledge support from the Office of the Vice President for Research at the University of Minnesota, and from the Global Initiatives Research Program at the University of Pennsylvania. All errors are our own.


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Copyright information

© Springer Science+Business Media, LLC 2017
Corrected publication October/2017

Authors and Affiliations

  • Katja Seim
    • 1
    • 2
    • 3
  • Maria Ana Vitorino
    • 4
    Email author
  • David M. Muir
    • 5
  1. 1.University of PennsylvaniaPhiladelphiaUSA
  2. 2.CEPRLondonUK
  3. 3.NBERCambridgeUSA
  4. 4.University of MinnesotaMinneapolisUSA
  5. 5.University of DelawareNewarkUSA

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