Improving the direct estimation of demand by adjusting for incorrect price-statements

By Klaus

We develop a new approach to measure consumers’ willingness to pay (WTP) as a basis for demand estimation that combines the traditional open-ended question format with a price concept selection task and learning tasks for consumers. Based on a conceptual discussion, in an empirical study among 781 consumers, we show that our new approach for measuring consumers’ WTP directly is able to significantly increase the validity of the WTP results.

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