Discussions followed Peter Culham's
presentation of a demand model, which was used as a reality check on the consumers'
surplus estimates, focusing on the issues surrounding the detection of income
effects and segmentation of the sample.
Peter Culham had assumed certain reasonable elasticities. However a reminder was
given to the floor that the income elasticity of demand for a linear model is
not equivalent to the income elasticity of willingness to pay.
Both Income and Log of Income had been tested as variables in the model and rejected
on the basis of t tests. The data had already been corrected for multiple response
bias using the jackknife procedure. It was not felt that a larger sample would
have altered these findings.
The scenario placed before respondents stated that use of the equipment was to
remain the same, but the costs of ownership would increase. No income relationship
was found, but the respondents could be partitioned by self-assessment of usage
levels, the length of ownership and business/personal use.
