Question

You are research manager for a large professional association. Currently your association offers members access to a number of benefits including (a) research studies and content, (b) member contact lists, and (c) conference attendance, all as part of one annual membership fee. Your association is considering offering two or three tiers of membership levels with different packages of benefits. Explain whether a regression/econometric study would be useful to evaluate this new policy and if not, recommend a method that would be more appropriate.

Answer 1

For econometric evaluation of different membership levels we need to know the cost and beefits for each level and we need it quantitatively. Regression or econometric valuation doesn't work on theoretical data. In order to evaluate the change in the plans we need to derive benefits for the changed system and for an old system. So all the members of the old system can be asked to give their utility or benefits on a common scale and same can be done when they are shifted to new different range of plans. So after this whole exercise we will have benefits and cost of different plans. So we can measure whether shifting to new plans is productive or not. If the benefits exceed the cost then we should shift otherwise not.