Tag
willingness_to_pay
11 findings
DevelopmentBasis Risk Valuation SensitivityAssigning an insurance contract to a distant rainfall station reduced mean willingness to pay by 29.45 Rupees (p < 0.01), cutting baseline policy valuation (68.4 Rupees) roughly in half.RCTBehaviour & psychologyBecker-DeGroot-Marschak Contract Valuation DisconnectMean willingness-to-pay for the real policy was Rs. 68.4 (median Rs. 70). Modifying the exit threshold increased expected payout value by Rs. 40-70 but only increased willingness-to-pay by Rs. 10.86 (p < 0.01); reducing per-mm shortfall payouts reduced expected value by Rs. 10-20 and reduced willingness-to-pay by Rs. 11.90 (p < 0.01). Introducing basis risk (distant station) halved valuation, reducing bids by Rs. 29.45 (p < 0.01).RCTFinance & microfinanceBecker-DeGroot-Marschak Contract Term MispricingRaising the exit threshold increased willingness to pay by Rs. 11 despite increasing expected payout by Rs. 40–70, whereas reducing millimeter deficit payments reduced willingness to pay by Rs. 12–13 while only lowering expected payout value by Rs. 10–20.RCTDevelopmentSubjective Consulting Valuation and Profit Decoupling ParadoxTailors reported a willingness to pay of 5.9 cedis (US $4) per hour to continue with Ernst & Young consultants, significantly higher than 2.8 cedis per hour for other consultants (p < 0.01) and 4.2 cedis per hour for alternate training (p < 0.05), despite consulting producing zero average income gains (0.905 cedi increase, p > 0.10) and an initial 26 cedi profit drop in Round 3 (p < 0.05).RCTBehaviour & psychologyEconomic Trade-Off Benchmarking of Identity BiasControl group participants were willing to forgo grocery items worth nearly twice the median daily per capita food expenditure to avoid hiring a transgender worker; participating in 3-person group discussions reduced this willingness to sacrifice grocery items to zero on average.RCTBehaviour & psychologyExperienced Participant Valuation SpilloverNew participants expressed a statistically significant higher willingness to pay for insurance policies (approx. Rs. 6–8 higher per policy) relative to returning multi-year study participants.RCTFinance & microfinanceFinancial Sophistication & Valuation SensitivityMoving from the least to the most financially sophisticated quartile roughly doubled the reduction in willingness to pay for reduced payout per mm (-11.90 Rs baseline) and increased willingness to pay for a higher exit threshold (+10.86 Rs baseline) by 50%.RCTFinance & microfinanceIndex Basis Risk SensitivityAssigning an insurance policy to a distant weather station (introducing substantial basis risk) reduced farmer willingness-to-pay by Rs. 29.45 (p < 0.01), effectively halving consumer valuation from the baseline average bid of Rs. 68.40 despite identical actuarial expected payouts.RCTFinance & microfinanceRetail Commercial Viability & Loading FactorsThe median willingness to pay was Rs. 70 per policy, significantly exceeding the actuarial value of Rs. 44–54. This ratio falls directly within US retail insurance claim-to-premium benchmark ranges (64.7%–76.2%).RCTFinance & microfinanceStated Versus Actual Demand DisconnectStated willingness to pay and actual insurance purchase were uncorrelated or negatively correlated (probit marginal effect = -0.0777, p < 0.10). Among households stating ex-ante willingness to pay at actuarially fair price, actual uptake was 37.2%, compared to 44.3% among those stating no ex-ante willingness. Unsubsidized demand was 0% in the study sample.RCTFinance & microfinanceWillingness to Pay for Debt Flexibility40.0% of existing microfinance clients were willing to pay an interest rate of 17.5% APR or higher for a grace period contract, and 30.8% of non-clients expressed willingness to pay above the MFI break-even threshold of 38.0% APR.Observational Study