Propositions addressing perceptions of reference price for public recreation services

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Abstract
The traditional economic model of supply and demand, which predicts that as price increases fewer consumers will decide to purchase, is incomplete because it ignores contextual and residual factors which influence consumers’ perceptions. This paper suggests nine propositions which evolve from a review of the literature related to consumers’ perceptions of reference price. The propositions are grouped under three headings: the roles of perception and reference price; the influence of information on reference price; and the role of equity in reference price perception. The propositions are intended to stimulate future research into understanding the role of reference prices in the context of public recreation services.