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Can I determine if WTP increases with increasing product quality in a CBC?

Hey everybody,

I would like to construct a CBC and I would like to find out if the WTP of participants increases accordingly to the increasing product quality. So, if I have quality as an attribute and let's say the levels are in points (the higher, the better the quality: e.g. 60 as worst quality, 70, 80, 90, and finally 100 as best quality). Price is another attribute (with levels: 5$, 10$, 15$, 20$, 25$) and there are further attributes, I still need to think about, but they are not that interesting for what I want to find out. My focus is really on the relationship between quality and price.

Is it possible to determine with Sawtooth CBC, if WTP increases with increasing quality of the product? And even more interesting for me: Is it possible to quantify that? In the end, I want to say something like: "If quality of the product increases about x, then the WTP increases about y. And if all that is possible, how can I realize it?

Thank you very much in advance. I am looking forward to reading your answers.
asked Jul 14 by Mary (340 points)

1 Answer

0 votes
Mary, yes I think there is a way to find this out.  

This is exactly what's likely to happen when you compute WTP:  assuming that higher levels of quality have more utility and that price utilities decrease with increasing price, then increasing quality will raise the share-equalizing price in simulations (which is our recommended way of calculating the WTP).
answered Jul 14 by Keith Chrzan Platinum Sawtooth Software, Inc. (77,750 points)
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