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Willingness to Pay for Service Attributes in the Japanese Digital Content Market

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    Abstract

    We estimate a mixed logit demand model for the Japanese digital content market and measure willingness to pay for service attributes. We find that the willingness to pay for an extra unit of service quality ranges from 62 Yen to 83 Yen per month. Meanwhile, the switching cost, a measure of disutility from switching to other service providers is estimated as 340 Yen ($3) per month, which is approximately the same as the current monthly subscription fee.

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    File URL: http://www.iuj.ac.jp/workingpapers/index.cfm?File=EMS_2006_14.pdf
    File Function: First version, 2006
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    Bibliographic Info

    Paper provided by Research Institute, International University of Japan in its series Working Papers with number EMS_2006_14.

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    Length: 12 pages
    Date of creation: Dec 2006
    Date of revision:
    Handle: RePEc:iuj:wpaper:ems_2006_14

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    Related research

    Keywords: Mixed logit; Hierarchical Bayesian model; Japanese Digital Content Market;

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    1. Lee, Jongsu & Kim, Yeonbae & Lee, Jeong-Dong & Park, Yuri, 2006. "Estimating the extent of potential competition in the Korean mobile telecommunications market: Switching costs and number portability," International Journal of Industrial Organization, Elsevier, vol. 24(1), pages 107-124, January.
    2. Brownstone, David & Train, Kenneth, 1998. "Forecasting new product penetration with flexible substitution patterns," Journal of Econometrics, Elsevier, vol. 89(1-2), pages 109-129, November.
    3. Klemperer, Paul, 1987. "Markets with Consumer Switching Costs," The Quarterly Journal of Economics, MIT Press, vol. 102(2), pages 375-94, May.
    4. Kenneth E. Train, 1998. "Recreation Demand Models with Taste Differences over People," Land Economics, University of Wisconsin Press, vol. 74(2), pages 230-239.
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