Price sensitivity and willingness to pay

2020 ◽  
pp. 64-81
Author(s):  
Erik Haugom
Keyword(s):  
Willingness To Pay ◽  
Price Sensitivity

Organic consumers’ price knowledge, willingness-to-pay and purchase decision

2016 ◽  
Vol 118 (11) ◽  
pp. 2732-2743 ◽  
Author(s):  
Manika Rödiger ◽  
Sabine Plaßmann ◽  
Ulrich Hamm
Keyword(s):  
Willingness To Pay ◽  
Design Methodology ◽  
Great Majority ◽  
Price Sensitivity ◽  
Purchase Decision ◽  
Content Type ◽  
Shopping List ◽  
Price Differentiation ◽  
Innovative Method ◽  
Practical Implications

Purpose The purpose of this paper is to gain insights into organic consumers’ price sensitivity by investigating price knowledge, willingness-to-pay and real purchase decision. Design/methodology/approach Organic food consumers’ price knowledge, willingness-to-pay and real purchase decision were examined in a comprehensive field study with 642 respondents. An innovative method was used to collect data for products that were truly relevant to the respondents: before entering the shop, respondents were asked about the items on their shopping list, the prices they expected to find and the maximum prices they were willing to pay. If respondents stated a willingness-to-pay value below the actual store price, they were approached again after shopping to verify their purchase decision. Findings The great majority of respondents failed to estimate the correct store price. The deviation between the estimated price and the actual store price was on average 19.9 per cent. The respondents were willing to pay on average 52.7 per cent above store prices. It was revealed that in 67.0 per cent of the cases, respondents bought a product even though the store price was higher than the willingness-to-pay they stated upon entering the store. Practical implications Category-specific insights into price knowledge and willingness-to-pay of organic consumers might be used for price differentiation strategies. Originality/value To the authors’ knowledge, this is the first study to investigate organic consumers’ item- and store-specific price knowledge, willingness-to-pay and real purchase decision in a single-source approach.

Do the prices of a preventive animal health product affect dairy farmers’ willingness to pay and product use? Evidence from an experimental study

2021 ◽  
Author(s):  
A G Cariappa ◽  
Balwant Chandel ◽  
R Sendhil ◽  
Anil Dixit ◽  
Gopal Sankhala ◽  
...  
Keyword(s):  
Willingness To Pay ◽  
Animal Health ◽  
High Price ◽  
Price Sensitivity ◽  
Health Product ◽  
Screening Effect ◽  
Product Usage ◽  
Product Use ◽  
Health Products ◽  
Implementation Costs

Abstract Should we distribute preventive animal health products for free or charge a positive price? The decision depends on the price sensitivity of the product and the effect prices have on product use. We explore this idea through a field experiment in which we randomize the price a farmer faces for an animal health product. We find that the demand for the product is highly sensitive to prices; willingness to pay (WTP) decreased from 44% at ₹ 100 to 18% at ₹ 500. Further, among farmers who were willing to pay, the product usage rate was 71% and usage did not increase in prices (lack of screening effect). Furthermore, we find that farmers whose animals were sick in the baseline had a higher WTP. These findings support the human capital model relating to demand for human health products. We argue that individuals behave in a similar way when the decisions concern their own health or the health of an animal they rear for commercial purposes. A highly subsidized distribution of the product is recommended due to high price sensitivity, lack of screening effect, equitable distribution among poor and lesser implementation costs found in this study.

Subjective Time Preference and Willingness to Pay for an Energy-Saving Durable Good

2001 ◽  
Vol 32 (3) ◽  
pp. 133-141 ◽  
Author(s):  
Gerrit Antonides ◽  
Sophia R. Wunderink
Keyword(s):  
Willingness To Pay ◽  
Energy Saving ◽  
Subjective Time ◽  
Durable Good ◽  
Discount Function ◽  
Hyperbolic Discount ◽  
The One ◽  
Two Parameter ◽  
Difference Effect ◽  
Better Than

Summary: Different shapes of individual subjective discount functions were compared using real measures of willingness to accept future monetary outcomes in an experiment. The two-parameter hyperbolic discount function described the data better than three alternative one-parameter discount functions. However, the hyperbolic discount functions did not explain the common difference effect better than the classical discount function. Discount functions were also estimated from survey data of Dutch households who reported their willingness to postpone positive and negative amounts. Future positive amounts were discounted more than future negative amounts and smaller amounts were discounted more than larger amounts. Furthermore, younger people discounted more than older people. Finally, discount functions were used in explaining consumers' willingness to pay for an energy-saving durable good. In this case, the two-parameter discount model could not be estimated and the one-parameter models did not differ significantly in explaining the data.

Measures of Anchoring in Estimation Tasks and Willingness to Pay

1993 ◽  
Author(s):  
Karen E. Jacowitz ◽  
Daniel Kahneman
Keyword(s):  
Willingness To Pay
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