Elicitation of willingness to pay for upgradeable products with calibrated auction-conjoint method

Abstract

Understanding consumer preferences is a key element of new product development and sustainable consumption. Among sustainable products, we consider new products with upgradability properties. Upgradeability helps to prolong the lifespan of a product, satisfying changing consumer preferences and needs. This additional created value must be measured by willingness to pay premiums. This paper uses a method which valorizes each attribute of the product and analyzes the determinants of these premiums. A key advantage of the calibrated auction-conjoint method is the possibility of estimating numerous attributes with a large number of attribute levels. The results support the idea that consumers are willing to pay premiums for upgradeable, sustainable products, although these premiums are rather weak for some durable products in the study.

Keywords:

• eco-innovation
• sustainable consumption
• upgradeable products
• preferences
• willingness to pay

Disclosure statement

No potential conflict of interest was reported by the authors.

Supplemental data

Supplemental data for this article can be accessed here.

Notes

1. The normalization assumes that the lowest rated attribute level is 0 in a new scale and the highest rated attribute level is 1.

2. Beforehand, the comprehension of the protocol was tested with the volunteers (administrative staff). All the remarks and advice were integrated. Moreover, the training round was replaced by an illustrated and detailed example in order to explain the best strategy in the context of the BDM mechanism.

3. Here and further standard deviation in brackets

4. In addition, with a high number of attributes included in each alternative, Batsell and Louviere (1991) advise limiting the number of alternatives and not to exceed 4-6.

Additional information

Funding

This work was partially supported by the “Design for upgradecycling” project (IDCyclUM) financially supported by the French research agency (Ref 11-ECOT-001-IDCyclUM-01) and the Research Cluster n°8 (GOSPI) for the Region Auvergne Rhône-Alpes.