Research Discussion Paper – RDP 2015-03 The Value of Payment Instruments: Estimating Willingness to Pay and Consumer Surplus

Contents

• Introduction
• Literature
• Data
• Distribution of Willingness to Pay for Card Payments
• Willingness to Pay for the Use of Credit Card Features
• Estimating Consumer Surplus under Various Surcharging Scenarios
• Conclusion
• Appendix A: Demographics
• Appendix B: Methodology – Estimation of Willingness to Pay
• Appendix C: Credit Card Holding and Rewards Program Membership
• Appendix D: Log-normal Model for Willingness to Pay
• Appendix E: Model Regressors for Predictive Model
• References
• Copyright and Disclaimer Notices

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The authors would like to thank David Emery, Darren Flood, Rochelle Guttmann, James Hansen, Greg Kaplan, Christopher Kent, Matthew Read, Tony Richards and John Simon for helpful discussions and feedback. The paper also benefited from valuable expertise and advice from Denzil Fiebig.