I have a client who wants to test an insurance product, and has provided me with a list of prices for the proposed product by age, gender and smoker status. He wants to know price elasticity, but the price increases exponentially as age increases.
I need to use an ACBC design as we have sample size issues and I will need to analyse small groups.
I can't figure out how to do this... or even if I should.
The problem is that a 26 year old male non-smoker would pay $230 per fortnight, while a 50 year old male smoker would pay $2300 per fortnight. How can I evaluate the appeal of this product when the price changes so drastically (and non-linearly) by age, sex and gender?
Any help greatly appreciated!