The Willingness to Pay (WTP)

Willingness to Pay (WTP) is the maximum amount a person is willing to spend to acquire a good or service. It reflects how much value or importance they place on it. For example, if someone values a concert at $100, that’s their WTP—meaning they wouldn’t pay more than that. WTP helps businesses understand customer preferences and price products accordingly. It varies based on individual needs, preferences, and circumstances. Essentially, WTP measures the price at which a person considers a purchase to be worth the cost.