FGI Research » thought leadership http://www.fgiresearch.com for a changing world Thu, 05 Jan 2012 15:59:12 +0000 en hourly 1 http://wordpress.org/?v=3.2.1 The Effects of Order Bias on Price Elasticity Measurement http://www.fgiresearch.com/insights/the-effects-of-order-bias-on-price-elasticity-measurement.html http://www.fgiresearch.com/insights/the-effects-of-order-bias-on-price-elasticity-measurement.html#comments Sat, 15 Aug 2009 13:56:40 +0000 Admin http://nemargut.com/fgitest/?p=1438 In a recent survey, FGI measured the potential price impact of including recycled content in a paper product that had not previously been available with this content.  The intent was to measure the degree to which there was a change in respondents’ expectations of price based on this alternative content.

Traditionally, surveys are designed to present price options on a basic scale, without methodological regard to the order in which the price deltas are presented to the respondents.  In this survey, a random half of the respondents were presented the pricing variation choices from low-to-high (i.e. 30% less to 30% more), and the other half were presented the price variations in the opposite order (30% more to 30% less).

Data from the “low-to-high” respondents skewed toward paying less for the product, while data from the “high to low” respondents skewed toward paying more for the products.  The same number said “about the same” in both cases; “about the same” was the midpoint of each scale. This finding reflects  a classic example of order bias.

Dino Fire
Director, Marketing Science
FGI Research

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