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	Van Westendorp Price Sensitivity Meter	Discrete Choice Experiment
Field	Marketing Research	Marketing Research
Family	Process / pipeline	Regression model
Year of origin	1976	1983
Originator	Peter H. van Westendorp	Jordan J. Louviere & George Woodworth; Daniel McFadden (random utility theory)
Type	Four-question survey method for perceived acceptable price ranges	Stated-preference experiment for estimating preferences and willingness to pay
Seminal source	Van Westendorp, P. H. (1976). NSS Price Sensitivity Meter (PSM) - A new approach to study consumer perception of prices. Proceedings of the 29th ESOMAR Congress, Venice, 139-167.	Louviere, J. J., & Woodworth, G. (1983). Design and Analysis of Simulated Consumer Choice or Allocation Experiments: An Approach Based on Aggregate Data. Journal of Marketing Research, 20(4), 350-367.
Aliases	PSM, Price Sensitivity Meter, Van Westendorp PSM, NSS Price Sensitivity Meter	DCE, Stated Choice Experiment, Stated-Preference Choice Experiment, Choice Experiment
Related	4	4
Summary	The Van Westendorp Price Sensitivity Meter (PSM) is a survey technique that maps the range of prices consumers find acceptable by asking four open-ended questions about what price would seem too cheap, cheap (a bargain), expensive, and too expensive for a product. Introduced by Dutch economist Peter van Westendorp at the 1976 ESOMAR congress, it rests on the idea that consumers judge price not against a single point but against internal reference boundaries, below which quality becomes suspect and above which the product seems overpriced. From respondents' answers the analyst builds four cumulative distributions and reads off their intersections, which define an optimal price point, an indifference price point, and a range of acceptable prices bounded by the points of marginal cheapness and marginal expensiveness. Unlike methods that estimate a demand curve, PSM characterizes perceived price acceptability and is especially useful early in pricing, when little is known about a new product. It is quick, intuitive, and widely used, though it measures perception rather than purchase behavior or revenue.	A discrete choice experiment (DCE) is a stated-preference method in which respondents repeatedly choose their preferred option from sets of alternatives described by systematically varied attributes, allowing the analyst to estimate how each attribute drives choice. Grounded in McFadden's random utility theory and operationalized for designed experiments by Louviere and Woodworth in 1983, the DCE treats each choice as the selection of the alternative with the highest latent utility and recovers the utility coefficients from observed choices. Because attributes are varied independently by experimental design, the method isolates the marginal effect of each attribute, including price, and yields marginal rates of substitution such as willingness to pay. DCEs are analyzed with multinomial (conditional) logit and, increasingly, with mixed and nested logit models that relax restrictive assumptions and capture preference heterogeneity. The approach is essentially the same machinery as choice-based conjoint but is the standard term in transport, health, and environmental economics, where it is used to value non-market goods. Its rigor and flexibility have made it a dominant stated-preference technique across the social sciences.