Estimation of Willingness to Pay for Smart Home Service by Contingent Valuation Method

Purpose: The purpose of this study is to evaluate the value of smart home service using contingent valuation method that is the method evaluating the value of service which will be provided in the future. Using this method, this study suggests proper price and market value of smart home service through figuring out customer's willingness to pay. Methods: To estimate willingness to pay for smart home service, this study uses double bounded dichotomous choice question. The survey was conducted for 2 months from December in 2015 to February in 2016. A total of 269 copies were used to estimate through R-programming. Results: The results of this study are as follows; Gender(especially woman), income, proposed price are the factors which affecting willingness to pay. As the result of this study, average price of willingness to pay for smart home service estimates as ₩29,653. Comparing with high-speed internet bundling service fee, this estimated price for smart home service is appropriate level for customers to accept. Conclusion: This study estimates consumer's willingness to pay for smart home service which is in the market entry stage. In corporate side, this study might be meaningful for estimating investment scale and profit. Also it could provide basis for establishing strategic policy to develop smart home service market in government side.

[1]  L. Whitmarsh,et al.  Social barriers to the adoption of smart homes , 2013 .

[2]  Robin Gregory,et al.  Why the WTA-WTP disparity matters , 1999 .

[3]  K. Courtney.  Privacy and Senior Willingness to Adopt Smart Home Information Technology in Residential Care Facilities , 2008, Methods of Information in Medicine.

[4]  김현정,et al.  A Study on Consumers’ Levels of Smart Home Service Usage by Service Type and Their Willingness to Pay for Smart Home Services , 2015 .

[5]  Byungho Jung,et al.  Contingent valuation method implemented by R: Case study - measuring value of information , 2011 .

[6]  W. Michael Hanemann,et al.  Welfare Evaluations in Contingent Valuation Experiments with Discrete Responses , 1984 .

[7]  Hyung-wook Kim,et al.  A Study on the Relation of Service Quality and Customer Satisfaction in Complex Service System , 2011 .

[8]  Hyo-Seok Yang,et al.  A Study on the Product-Service Valuation of Handset Manufacturer using Fuzzy Integral , 2010 .

[9]  Meng Shang,et al.  The influence of the IoT based healthcare user’s experience value on the usage and continuous use intention -Focused on Xiaomi Mi band user in china- , 2016 .

[10]  Ki-Jung Kum,et al.  A Study on Value Evaluation of Mobile Traffic Information Provis Improvement - Based on Contingent Valuation Method - , 2006 .

[11]  Alan Randall,et al.  A satisfactory benefit cost indicator from contingent valuation , 1987 .

[12]  Sang-Woo Lee,et al.  Estimation of Willingness To Pay for Mobile Data Service , 2012 .

[13]  Michel Dupagne,et al.  Exploring the Characteristics of Potential High-Definition Television Adopters , 1999 .