The importance of price last paid in developing price expectations for a public leisure service.

Abstract

Public reaction to the pricing of public leisure services continues to confound decision makers. Reaction to increased price levels is particularly problematic for public administrators. This field study considers the psychological importance of price last paid in determining recreation participants' price expectations. Results suggest that price last paid can act as a price anchor stored in memory, thereby influencing assessments of new pricing initiatives. Respondents often expected to pay fees at a new recreation facility that were consistent with fee levels last paid at other lesser facilities. This trend was especially true for those who had paid admission fees repeatedly prior to participating in the study. Further, for many participants, price last paid explained more variation in expected price levels than did level of participation, attachment to the recreation facility, and their own reports of price sensitivity.