These options are ideally presented in either ascending or descending order, and typically include between four and six options. I would like to conduct a study assessing clients' willingness to pay for quality maternal health care delivery. There are other more complicated formats, but it can be difficult to know when to apply these formats given the specifics of the product/service being presented, the sample size, and the decisions that need to be made using this survey data. Each option should seem like a reasonable price for your product/service, and they should be evenly spread around what you’d consider an ideal price for your product (i.e. As you learned in Week 1, understanding customer willingness to pay (WTP) is critical for effective pricing. This range will guide your thinking and research later on about the optimal price to charge. Below, we list the various kinds of willingness to pay surveys, and explain how your answers to the three questions above can help you determine what kind of willingness to pay survey to use. At what price would you consider [this product/service] to be priced so low that you would feel the quality couldn’t be very good? How much would you be willing to pay for [this product/service]? survey items to construct a composite willingness to pay measure. Reasons for using the CVM approach 13 Box 2. ScienceDirect ® is a registered trademark of Elsevier B.V. ScienceDirect ® is a registered trademark of Elsevier B.V. It’s a good idea to limit the types of characters respondents can use in their answers to positive integers only, and be sure to specify the currency. Finally, participants responded to var- ious items concerning environmental and political attitudes as well as socio-demographics (see SI-3 for survey items and SI-4 for the willingness to pay measurement). There aren’t many cases where this is preferable to an open-ended expected cost question. As a survey-based method that directly elicits respondents' willingness to pay (WTP), the contingent valuation method (CVM) is considered to be an appropriate method for valuing water quality improvements or other services, because the value of water quality improvements includes not only on-site use value but also non-use value (Wang et al. survey—how much they value the good. Namely: Below, we list the various kinds of willingness to pay surveys, and explain how your answers to the three questions above can help you determine what kind of willingness to pay survey to use. the middle option is your target price point—enough to cover your costs). The Oxford Encyclopedia of Economics refers to “willingness to pay” as the maximum amount that an economic agent is willing to pay to acquire a specified good or service. An online discrete choice experiment (DCE) was used to survey commissioners and decision makers in the UK to assess their willingness-to-pay for childhood obesity programmes. The most basic method is to measure the Willingness to Pay (WTP) for medical services. After presenting your product/service concept, ask respondents how much they’d be willing to pay for the concept, and leave it open-ended so they can type in whatever answer they want. Expected cost (vs. willingness to pay) questions work for any kind of product/service concept, but the model is especially ideal for new or novel product/service concepts. So one way to try to find out willingness to pay, is just to ask people directly. Indirect surveys - Give customers a series of different products or services to choose from and ask which of the options the customer is most willing to pay for. It should be asked immediately after the concept presentation, and it goes like this: How much would you expect this product/service to cost? So it’s best, in these cases, to separate expected cost from willingness to pay and focus on just one—in this case, expected cost. Each question should be followed by an open-ended text box. What happens when willingness to pay collides with ability to pay? Nick is the Founder/CEO at PeopleFish. The second survey was designed to collect information on the possible changes in attitudes towards the ARTS due to having experienced the system and being informed by awareness-raising campaigns and to collect information on users' willingness to pay and their perception of safety, security and emergency management on board the ARTS. not a radically new product/service), surveys that present the concept in full detail, and surveys that may not get many responses (if you expect more than 400 responses, consider using a Van Westendorp instead). PeopleFish analysts review every one of our clients’ surveys, and we will make a recommendation for the best way to ask about willingness-to-pay based on the specifics of each individual project. A good survey question is asked in a precise way at the right stage in the buyer’s journey to give you solid data about your customers’ needs and drives. But if you’re product is something totally unheard of—say, a robotic personal assistant that follows your customers around and completes basic tasks for them—respondents won’t have a clue how much they’d be willing to pay. And someone would say, hey, I know how much I'm willing to pay, I'd pay … Numerous approaches to measure willingness-to-pay with differential conceptual foundations and methodological implications have been presented in the relevant literature so far. View all posts by Nick Freiling, Click to share on Twitter (Opens in new window), Click to share on Facebook (Opens in new window), Click to share on LinkedIn (Opens in new window), How to Present Your Product (or Service) Concept in a Survey. Background: Willingness to pay is a valuation technique that has rarely been applied in mental health economics. surveys are frequently referred to as stated preferences (cf. They go like this: 1. Introduction A fundamental premise of economic science is that consumers have well-formed, stable preferences, an d that their choices reflect these preferences. This format works for most willingness-to-pay surveys, but is especially ideal for product/service concepts with existing substitutes (i.e. A radically new product/service ), surveys that present the concept in full detail, and expressed forms the price... ) and why it ’ s designed depends on a few of the exercise, are answers. 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