Automatic price appraisals: why they matter and how to measure them

Accurately estimating consumers' willingness-to-pay (WTP) is crucial to product design, pricing decisions, and the design of competitive marketing strategies. However, traditional self-report measures of WTP are susceptible to many reporting biases, including tactical responding or an inability to make accurate estimates. Importantly, appraisals also occur automatically (i.e., in the absence of substantial time, intention, awareness, and/or substantial cognitive resources) and implicit measures used to capture automatic appraisals are less susceptible to the sort of reporting biases that self-report measures can be affected by. However, the only existing implicit measure for assessing automatic price appraisals (the Task Rule Congruency paradigm, 'TRC') is impractical because of the large number of trials and time it requires. Accordingly, here we introduce the Implicit Attribute Classification Task (IMPACT), test its effectiveness for the measurement of automatic price appraisals (Study 1), and directly compare its effectiveness and utility with that of the TRC (Study 2). We find that the IMPACT is an efficient measure of automatic price appraisals, that it produces considerably larger effects compared to the TRC, and that it does so while substantially shortening the procedure. We also discuss how the IMPACT scores can be used to derive an implicit measure of willingness to pay. Our findings make a substantial contribution to both research and practice by providing an effective tool that facilitates, for the first time, an efficient exploration of implicit WTP.

Does in vitro fertilization (IVF) treatment provide good value for money? A cost-benefit analysis

Background

Using traditional health technology assessment (HTA) outcome metrics, such as quality-adjusted life-years, to assess fertility treatments raises considerable methodological challenges because the objective of fertility treatments is to create new life rather than extend, save, or improve health-related quality of life.

Objective

The aim of this study was to develop a novel cost-benefit framework to assess value for money of publicly funded IVF treatment; to determine the number of cost-beneficial treatment cycles for women of different ages; and to perform an incremental cost-benefit analysis from a taxpayer perspective.

Methods

We developed a Markov model to determine the net monetary benefit (NMB) of IVF treatment by female age and number of cycles performed. IVF treatment outcomes were monetized using taxpayers' willingness-to-pay values derived from a discrete choice experiment (DCE). Using the current funding environment as the comparator, we performed an incremental analysis of only funding cost-beneficial cycles. Similar outputs to cost-effectiveness analyses were generated, including net-benefit acceptability curves and cost-benefit planes. We created an interactive online app to provide a detailed and transparent presentation of the results.

Results

The results suggest that at least five publicly funded IVF cycles are cost-beneficial in women aged <42 years. Cost-benefit planes suggest a strong taxpayer preference for restricting funding to cost-beneficial cycles over current funding arrangements in Australia from an economic perspective.

Conclusions

The provision of fertility treatment is valued highly by taxpayers. This novel cost-benefit method overcomes several challenges of conventional cost-effectiveness methods and provides an exemplar for incorporating DCE results into HTA. The results offer new evidence to inform discussions about treatment funding arrangements.

Cost-Effectiveness Analyses of Home Parenteral Nutrition for Incurable Gastrointestinal Cancer Patients

Background

Appropriate nutritional support, including supplemental home parenteral nutrition (sHPN), may improve prognosis and quality of life (Qol) of malnourished cancer patients. We aimed to explore the cost-effectiveness of sHPN for incurable gastrointestinal cancer patients from the Chinese healthcare perspective.

Method

Clinical data were extracted from a randomized controlled trial (NCT02066363). Patients were randomized into the sHPN group or the non-sHPN group (receiving best practice nutritional care). A Markov model was established with a 6-week cycle length. Costs were acquired from local hospitals, effect parameters included quality-adjusted life year (QALY), Qol, body mass index, fat-free mass (FFM), FFM index, handgrip strength, and a 6-min walking test. Sensitivity analyses were conducted with a willingness-to-pay (WTP) set at 3 per capita gross domestic product ($29,307/QALY).

Results

When considering QALY as a utility, the incremental cost-effectiveness ratio (ICER) was $24,289.17, with an incremental cost of $2,051.18 and an incremental QALY of 0.0844 between the sHPN group and the non-sHPN group. Furthermore, we explored the cost-effectiveness of sHPN from multidimensions, where we analyzed various effect parameters at different visits; the results showed a superior benefit for patients in the sHPN group except for the handgrip parameter at visit 2. Sensitivity analysis demonstrated the influence of utilities in the sHPN group, but the sHPN group was still cost-effective with a WTP of $2,500/QALY.

Conclusion

In China, sHPN was cost-effective for patients with incurable gastrointestinal cancer, which suggested further applications in clinical practice and provided references for clinical decisions and pricing.

A Willingness-to-Pay Associated Right Prefrontal Activation During a Single, Real Use of Lipsticks as Assessed Using Functional Near-Infrared Spectroscopy

Understanding consumer preferences and behavior is a major goal of consumer-oriented companies. The application of neuroscience to this goal is a promising avenue for companies. Previously, we observed a positive correlation during actual cosmetic use between the right dorsolateral prefrontal cortex (dlPFC) activity, measured by functional near-infrared spectroscopy (fNIRS), and the associated willingness-to-pay (WTP) values. However, we were unable to find any consistent group differences in the right dlPFC between different powdery foundations. Thus, the main objective of this study was to replicate the previous study and in addition, we aimed to refine the method of the previous study to increase the chance that a difference in valuation between different products can be detected. Twenty-five frequent lipstick using females were asked to apply six different lipsticks to their lips and to record how much they were willing to pay. To maximize the variation of the subjective experience of the products and the associated brain activity, the most preferred color lipstick and a less preferred color lipstick were chosen for each participant, and each color of lipstick had three different textures (Lo, Mid, and Hi). The time series was analyzed with the general linear model (GLM) and the correlation between the right dlPFC beta scores for the lipsticks and their respective WTP values conducted for each participant. This revealed a significant positive correlation and replicated our previous study. Surprisingly, the lipstick color and the texture manipulations did not result in any consistent differences in WTP and similarly no consistent group differences in brain activations. This study replicates our previous study extending it to a different type of cosmetic. The right dlPFC activity during the use of cosmetics may be a potential brain-based personalization or product selection process biomarker.

The role of production process and information on quality expectations and perceptions of sparkling wines

BACKGROUND

This study, by combining sensory and experimental economics techniques, aims to analyse to what extent the production process, and the information about it, may affect consumer preferences. Sparkling wines produced by Champenoise and Charmat methods were the object of the study. A quantitative descriptive sensory analysis with a trained panel and non-hypothetical auctions combined with hedonic ratings involving young wine consumers (N = 100), under different information scenarios (Blind, Info and Info Taste), were performed.

RESULTS

The findings show that the production process impacts both the sensory profile of sparkling wines and consumer expectations. In particular, the hedonic ratings revealed that when tasting the products, both with no information on the production process (Blind) and with such information (Info Taste), the consumers preferred the Charmat wines. On the contrary, when detailed information on the production methods was given without tasting (Info), consumers liked the two Champenoise wines more.

CONCLUSION

It can be concluded that sensory and non-sensory attributes of sparkling wines affect consumers' preferences. Specifically, the study suggests that production process information strongly impacts liking expectations, while not affecting informed liking. © 2018 Society of Chemical Industry.

Is More Better? Insights on Consumers' Preferences for Nutritional Information on Wine Labelling

BACKGROUND

Nowadays there is a strong debate on the need to introduce mandatory nutritional information on alcoholic beverages labels, and particularly on wine, as a tool to promote more health-conscious drinking patterns in society. In 2018, the European alcoholic beverages industry presented a self-regulatory proposal, now under assessment by the European Commission. The most critical issue is how to convey nutritional information to consumers, as producers should decide to apply information on label or off-label.

METHOD

The current study measured, through a non-hypothetical, incentive compatible artefactual field experiment, Italian wine consumers (N = 103) preferences for four different formats of wine nutritional labelling, namely: back label with the indication of kcal for glass of wine, with the nutritional panel referred to 100 mL, without nutritional information (but with a link to an external website) and with the indication of key nutrients for glass of wine.

RESULTS

Findings reveal that respondents preferred the nutritional panel on the back label, assigning the lowest preference to the less informative wine label (only with a website recall). Furthermore, results show a low level of respondents' knowledge of wine nutritional properties.

CONCLUSION

Findings, while limited in terms of sample representativeness, seem to support the European Consumer Organisation and the European Alcohol Policy Alliance objection to an off-line label and the advocacy for a traditional and complete on label nutritional information on wine.

Valuing a Lifestyle Intervention for Middle Eastern Immigrants at Risk of Diabetes

Willingness-to-pay (WTP) techniques are increasingly being used in the healthcare sector for assessing the value of interventions. The objective of this study was to estimate WTP and its predictors in a randomized controlled trial of a lifestyle intervention exclusively targeting Middle Eastern immigrants living in Malmö, Sweden, who are at high risk of type 2 diabetes. We used the contingent valuation method to evaluate WTP. The questionnaire was designed following the payment-scale approach, and administered at the end of the trial, giving an ex-post perspective. We performed logistic regression and linear regression techniques to identify the factors associated with zero WTP value and positive WTP values. The intervention group had significantly higher average WTP than the control group (216 SEK vs. 127 SEK; p = 0.035; 1 U.S.$ = 8.52 SEK, 2015 price year) per month. The regression models demonstrated that being in the intervention group, acculturation, and self-employment were significant factors associated with positive WTP values. Male participants and lower-educated participants had a significantly higher likelihood of zero WTP. In this era of increased migration, our findings can help policy makers to take informed decisions to implement lifestyle interventions for immigrant populations.