Employing Economic Principles for the Benefit of Entrepreneurs: Assessing Added Value, Willingness to pay, and the Demand for the Keyper
Open Access
Author:
Gershanok, Ezra
Area of Honors:
Economics
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
Jadrian Wooten, Thesis Supervisor James R. Tybout, Thesis Honors Advisor
Keywords:
Ezra Gershanok Keyper Economics willingness to pay convenience entrepreneurship entrepreneurs
Abstract:
What is convenience worth to consumers? This is the question that many entrepreneurs have built their business around. This thesis will focus on how entrepreneurs can measure the added convenience of their product or service using a hedonic regression model and willingness to pay survey. This data can also be used to create a demand curve which is necessary for entrepreneurs to find the profit-maximizing price. The hedonic regression and willingness to pay data in this research will focus on the Keyper as a proxy for convenience. The Keyper is a product designed to solve the problem of lost dorm keys by adding a key pocket to the existing regular phone wallet. The findings and methods of this research will draw on and add to the existing literature on measuring willingness to pay, the convenience economy, and efficient pricing. This thesis reveals that, after controlling for demographic variables, respondents are willing to pay 5.8% more than the regular phone wallet for the added convenience of a Keyper.
