Understanding Customer Values – Behavioural Experiment Report – March 2019

Practice area: Behavioural and experimental economics | Behavioural Economics | Consumer behaviour | Consumer markets and protection | Regulatory economics | Regulatory economics | Water and sewerage
Client: Yorkshire Water
Published: 6 March, 2019

This study was undertaken for Yorkshire Water, as subcontractor to Aecom, to understand the values customers place on water service attributes as part of the 2019 price review process. London Economics conducted an online behavioural experiment to examine customers’ willingness to pay for service improvements and the impact of various framing treatments on customers’ valuations. Respondents either completed the experiment under the ‘baseline’ treatment or one of three alternative treatments under which: a) comparative industry information was shown, b) the respondent’s remaining disposable income as a result of their choices was presented, or c) the service levels were reframed as frequencies instead of likelihoods. These treatments aimed to address some criticisms from Ofwat of traditional statement preference WTP surveys.