Have an idea?

Visit Sawtooth Software Feedback to share your ideas on how we can improve our products.

Treating price with conditional pricing

I understand that the prices shown to respondents are based on certain percentage increase or decrease from the average price. However, in the Sawtooth Research Paper series "Three Ways to Treat Overall Price in Conjoint Analysis", one of the challenges mentioned is that the resulting prices has to be rounded to the nearest $100, or made to end in a 9 for consumer goods. I am not sure I understand this correctly. Does this mean I cannot use prices with decimals? For example, if the price is $12.25, should I round it to $12?
asked Nov 16, 2016 by menon (240 points)

1 Answer

0 votes
Show whatever makes sense to the respondent and mimics the prices shown in the real world.  If prices typically include decimals, then use decimals.  If prices typically end on the 99s in the real world (e.g. 9.99) then perhaps you should also try to make your prices in the conjoint survey end on the 99s.  

Just always be on the lookout during analysis for significant interactions between price and the attribute you make the prices conditional upon.
answered Nov 16, 2016 by Bryan Orme Platinum Sawtooth Software, Inc. (144,240 points)
Thanks very much Bryan! That clarifies my query. I should say that the Sawtooth user manual was also very helpful.  I will lookout for interactions.