Material incentive or emotional incentive-A study on the effect of incentive mechanism on passengers' willingness to pay for carbon offset in aviation

The rapid development of the aviation transport industry has significantly increased carbon emissions. Due to limitations in research, development time, and production costs, new energy aircraft and sustainable aviation fuel cannot be widely adopted in the short term. As a result, carbon offset is currently the primary method to balance aviation carbon emissions. Despite the introduction of carbon offset programs by most airlines, passengers' willingness to pay (WTP) remains low. This study aims to explore what incentive mechanism is conducive to enhancing passengers' WTP for aviation carbon offset. We propose three categories of incentive mechanisms: material incentive mechanism (MIM), emotional incentive mechanism (EIM), and hybrid incentive mechanism (HIM), with the latter further subdivided into four types based on incentive form and seasonal dimensions. A questionnaire survey is conducted to collect decision-making data on passengers' participation in aviation carbon offset. Based on this data, a public goods game (PGG) model is built to explore the impact of different incentive mechanisms on passengers' WTP. The simulation results indicate that: (i) Incentive mechanisms increase passengers' WTP compared to no incentive. (ii) MIM and first material incentive followed by emotional incentive (HIM2) are the most effective. (iii) The use of purely material incentives has a limited effect on improving cooperation frequency (f). These findings provide theoretical guidance and strategic recommendations for airlines in implementing carbon offset programs.