Determinants of Willingness to Pay for Handicraft Products – an Experimental Approach

Purpose: The main purpose of this study is to identify the determinants of the willingness to pay for handicraft products. Methodology: In the study the methods of experimental economics were used. In Study 1, a laboratory experiment on a sample of students (N=218) was conducted; the subject of valuation was a voucher for the caricature or portrait. In Study 2, field experiments at shopping centers in Poland were performed, comprising a large and naturally diversified sample of customers (N=1664). In Study 2 participants reported willingness to pay for hand-painted ceramic mugs. In both experiments, the willingness to pay for handicraft products was elicited hypothetically as well as with actual transactions. Findings: The results indicated that in both studies WTP was higher for participants who liked presented products, as compared to the rest. Important factors influencing WTP values were also the need for the product, financial abilities and information about the artist. Moreover, some sociodemographic characteristics of respondents (sex, age and employment status) significantly affected the willingness to pay for the mugs. Research implications: The research results allowed for the formulation of some marketing recommendations. Firstly, handicraft products should be properly presented to expose their beauty and aesthetic features. Moreover, the key issue for handicraft creators is to match the design and the price of the products to potential customers. What is more, when advertising a handicraft product, it is worth emphasizing various possibilities of using the product, e.g. the possibility of giving it as a gift. Originality/value: To the best of the author’s knowledge, this study is the first in which determinants of WTP values for handicraft products are investigated with the usage of both laboratory and field experiments.