A story on page 4 of yesterday's Financial Times says that on average, Britons are prepared to pay £4,800 to secure a parking space with their residence. Seven out of ten would pay some amount. One per cent claim they would be willing to pay up to £30,000 for the parking space.
I wonder if the survey question differentiated between survey respondents' abstract willingness to pay and survey respondents' willingness to pay given that they had the ability to pay. This is something that Dave and Liam have probably looked at a fair bit.
3 comments:
There are some papers which look at whether hypothetical willingness to pay corresponds to actual willingness & the answer, apparently, is yes.This is important for the EEG work we are doing.How the general the finding is I do not know.
The familiarity of the scenario is crucial the validity of willingness-to-pay responses. The Mental Acounting literature (e.g. Thaler, 1980) shows that even in the private goods market, people are prone to framing effects. These issues are exercerbated wildly when people are asked how much they would pay, hypothetically, for a good for which they have no reference price e.g. to preserve an endangered species.
The purchase of a parking space seems more and more common and so I imagine the results cited in the article are pretty reasonable. But then I'm biased because I happen to know that my sister spent 30k on a parking spot at Grand Canal dock. If that seems exorbitant, mental accounting can explain the logic. In the course buying her apartment, a huge transaction, she was offered the opportunity to purchase a parking spot in the same building. 30,000euros seems less significant when the frame of reference is the purchase price of an apartment. Also, the parking spot might be reframed as an apartment with offstreet parking, as opposed to an apartment with no parking. I imagine the former is quite a bit easier to sell than the latter.
30k on a parking spot at Grand Canal dock - what is the world coming to!
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