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Can I relate the change in WTP to the change in quality in one number?

Thank you for your answer, Keith.

I am interested in calculating a value or scale with wich I can measure the relationship between quality (in points) and the price, participants are willing to pay. How would I do this?

I can calculate the WTP for each respondent with the help of the utilities. But, how can I relate the change in WTP to the change in quality in one single number? Like a correlation coefficient for each individual. I want to demonstrate the consistency in the relationship of product increase leading to higher WTP.

Do you have a solution for that?
Thank you in advance.

asked Jul 16 by Mary (300 points)

1 Answer

0 votes
Mary, I'm a little confused how what you're looking for is different from the respondent-level WTPs you say you've created.  

It sounds like from the utilities you're calculating the utility value of changes in quality and then converting those changes in utilities to WTP $ because you know how utility points convert to $, am I correct?

If so, then it it seems you've already captured the interesting information.  I don't quite understand what you mean by a correlation coefficient for each individual.  Since the WTP calculation is deterministic, I might imagine that the correlation at the respondent level would be 1.0, assuming utilities have been constrained to move in the right directions.
answered Jul 17 by Keith Chrzan Platinum Sawtooth Software, Inc. (73,175 points)