Toolkit for Service Pricing:
Contingent Valuation Methods
By Emmanuel Fragnière
https://www.youtube.com/watch?v=AiA8wWDfnUY
HES-SO Valais-Wallis
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Development of a fictitious "ValdAn Ebike Pro" application (subscription valid for one year)This fictitious case study is based on the magnificent Swiss destination of Val d'Anniviers. The aim here is simply to learn what service pricing is all about!��App attributes:�Itineraries �Logistical services (repairs, battery replacement, punctures, etc.) �Safety (medical interventions, rega) �Events and groups
HES-SO Valais-Wallis
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Question 1
How much are you willing to pay to subscribe to this app?
Answer: please indicate the amount in USD
HES-SO Valais-Wallis
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Question 2
Would you accept to pay a price of 80 USD:
Answer: yes or no
HES-SO Valais-Wallis
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Question 3
Your friend, who has the app, gets a flat tire and the technical team repairs it within 20 minutes. How much are you willing to pay to subscribe to this app?
Answer: in USD
HES-SO Valais-Wallis
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Question 4
You have a flat tire and the technical team repairs it within 20 minutes of the incident. You have to pay 50 CHF for the repair.
How much are you willing to pay to subscribe to this app?
HES-SO Valais-Wallis
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Question 5
Rank in order of preference
A: logistics department
B: Security
C: event and group
Answer: 3 letters in a row
HES-SO Valais-Wallis
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Hypothetical scenario for �the quasi-experiment: �The case of the monetization of an E-Bike application for the Val d'Anniviers�
The vignette (hypothetical scenario for the quasi-experiment) proposed to our sample of 57 people was as follows: "A young person who regularly practices sport e-bike in the Val d'Anniviers is offered an annual subscription to an E-Bike app with the following attributes: route, logistical service, security, event and group." In order for participants in the experiment to project themselves into the "character" of the vignette, photos, as well as a video, all produced by the Val d'Anniviers tourist office, were projected at the beginning of the experiment. Then a series of questions (one per slide) were asked successively.
All participants were given a 5-page sheet to provide one answer per page for each question. Question 1 was: How much would you be willing to pay to subscribe to this application? (Answer: indicate the amount in CHF). Question 2 was: Would you be willing to pay a price of 80 CHF? (Answer: yes or no). Question 3 was: Your friend, who has the application, has a flat tire and the technical team repairs it in 20 minutes. How much are you willing to pay to subscribe to this application? (Answer: please indicate the amount in CHF). Question 4 was: You have a flat tire and the technical team repairs it within 20 minutes. You have to pay 50 CHF for the repair. How much are you willing to pay to subscribe to this application? (Answer: indicate the amount in CHF). Question 5 was: Rank in order of preference: A: Logistics, B: Security, C: Event and Group. (Answer: 3 letters in a row).
The approach used in this quasi-experiment is called WTP (Willigness To Pay) which itself belongs to the category of contingent valuation methods. Contingent valuation methods are used to assess the value of environmental intangibles (e.g., when a court has to fine a company that has polluted a natural park by dumping chemical waste). The main results of the statistical analysis of this quasi-experiment can be summarized as follows. The sample size is 57. The average price proposed for the application is 52.56CHF and its median is 25CHF. Question 2 is based on a special case of WTP which is WTA (Willigness To Accept). The main result is that the 80CHF proposal is accepted in one third of the cases. For question 3, the repair of the flat tire (logistics service) by another group member via the app, does not change the WTP of our participant. For question 4, the repair of the participant's flat tire lowers the app's WTP by 14CHF. Finally, question 5 yields the following trio for salient app attributes: the IBC is requested 51% of the time (B. security, A. logistics service, C. event and group).
HES-SO Valais-Wallis
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Experiment
All participants were given a 5-page handout to provide one answer per page for each question. Question 1 was: How much would you be willing to pay to subscribe to this application? (Answer: indicate the amount in CHF). Question 2 was: Would you be willing to pay a price of 80 CHF? (Answer: yes or no). Question 3 was: Your friend, who has the application, has a flat tire and the technical team repairs it in 20 minutes. How much are you willing to pay to subscribe to this application? (Answer: please indicate the amount in CHF). Question 4 was: You have a flat tire and the technical team repairs it within 20 minutes. You have to pay 50 CHF for the repair. How much are you willing to pay to subscribe to this application? (Answer: indicate the amount in CHF). Question 5 was: Rank in order of preference: A: Logistics, B: Security, C: Event and Group. (Answer: 3 letters in a row).
HES-SO Valais-Wallis
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Results
The approach used in this quasi-experiment is called WTP (Willigness To Pay), which itself belongs to the category of contingent valuation methods. Contingent valuation methods are used to assess the value of environmental intangibles (for example, when a court has to fine a company that has polluted a natural park by dumping chemical waste).
The main results of the statistical analysis of this quasi-experiment can be summarized as follows. The sample size is 57. The average price proposed for the application is 52.56CHF and its median is 25CHF. Question 2 is based on a special case of WTP which is WTA (Willigness To Accept). The main result is that the 80CHF proposal is accepted in one third of the cases. For question 3, the repair of the flat tire (logistics service) by another group member via the app, does not change the WTP of our participant. For question 4, the repair of the participant's flat tire lowers the app's WTP by 14CHF. Finally, question 5 yields the following trio for salient app attributes: the BAC is requested 51% of the time (B. security, A. logistics service, C. event and group).
HES-SO Valais-Wallis
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