Willingness to Pay for Firm Reputation: Paying for Risk Rating in the Annuity Market
Pilar Alcalde () and
MPRA Paper from University Library of Munich, Germany
In this paper we test the existence of a reputation premium in the context of the annuity market in Chile. This market provides an exceptionally good setting to measure consumers’ willingness to pay: retirees choose between a set of offers that vary only in the quote and the risk rating –a measure of the firm’s solvency– within each class of product. We find that willingness to pay for the reputation linked to the firm’s risk rating is statistically and economically significant. We also find a strong relationship between willingness to pay and intermediary choice, and we explore four potential sources of correlation between them.
Keywords: reputation premium; willingness to pay; demand estimation; annuity markets (search for similar items in EconPapers)
JEL-codes: D12 D53 L14 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dcm and nep-upt
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:68993
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