Willingness to pay (WTP) scales

This chapter offers an overview of methodologies and scales for quantifying customer willingness to pay (WTP), an essential metric for pricing strategies. It evaluates various measurement approaches, including open-ended questioning, dichotomous yes/no questions, multi-item scales focused on loyalty and sustainability premiums, conjoint analysis, and the novel comparative method of valuation. The chapter underscores the effectiveness and validity of simple open-ended questions for practical WTP estimation, highlighting their relative accuracy despite potential hypothetical bias. It also addresses methods to mitigate biases, notably the use of cheap talk and certainty scales, and considers the role of social desirability in influencing survey responses. The chapter ultimately provides practical guidance for researchers and practitioners to accurately measure and interpret consumer WTP, emphasizing methodological rigor and caution regarding potential response biases.