Determination of Retail Prices of Public Services: An Experimental Approach to Brazilian Social Security

Abstract

This research investigates Price Management in order to attract clients to public services. The object investigated is the National Institute of Social Security – INSS. In this public service the clients/citizens have to contribute monthly in order to access benefits from this public service. Among many segments attended by INSS, undergraduate students are not obliged to make monthly contributions, but it is necessary for them to contribute if they want to access Social Security Benefits. In this sense, the problem to be researched is: What is the ideal price range for undergraduate students to contribute to INSS?  The objective is to identify an acceptable price range for this segment to increase their access to the services provided by INSS. A Factorial Experiment was carried out to verify the effects of Information Availability and Reference Price variables on Average Price to Pay Pre-Disposition. The main and interaction effects of the variables were analyzed. The research was conducted with four randomized sample groups considering treatment conditions regarding this experiment. The results provided strong evidence that Information Availability can increase INSS services accessibility and the Average Price to Pay Pre–Disposition concerning undergraduate students. Reference Price use showed a decrease regarding Average Price Pre-Disposition in this segment, but it is capable of increasing the accessibility concerning to citizens/clients.