That's a good approach before you take into account the effects of marketing/positioning. Customers will not always hire the cheapest freelancer, they will often (irrationally?) believe that successful developers with a high hourly rate must be particularly good.
When I founded my company (with a different business, i.e. not around web development for clients) in 2000 after a year of freelancing, I set my hourly rates ridiculously high (about 18 times my previous rates) because I didn't really want to do any development for clients at that time and to my surprise, I still got some clients who felt that I must be particularly good. So while you cannot generelly expect to make more money on average by setting your rates very high, it's foolish to set them based on your cost calculation and general demand only.
When I founded my company (with a different business, i.e. not around web development for clients) in 2000 after a year of freelancing, I set my hourly rates ridiculously high (about 18 times my previous rates) because I didn't really want to do any development for clients at that time and to my surprise, I still got some clients who felt that I must be particularly good. So while you cannot generelly expect to make more money on average by setting your rates very high, it's foolish to set them based on your cost calculation and general demand only.