How Consumers’ Willingness to Pay is Measured in Practice: An Empirical Analysis of Common Approaches' Relevance

Abstract

We conduct an empirical study to assess the relevance of common methods used to survey consumers’ willingness to pay (WTP) from practitioners’ perspective. The survey results show that direct approaches are predominantly used in practice; this is probably due to their less costly application. Researchers should therefore pay more attention to proceeding development of direct methods and/or indirect approaches that require less interview time in order to save costs. Furthermore, market research firms’ customers seem to strongly influence the selection of a method. Research results on the relative performance of methods should therefore not only be communicated to market researchers but also to their customers.

Keywords: willingness to pay, pricing, market research