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Willingness to pay for the infrastructure investments for alternative fuel vehicles

  • Nobuyuki Ito

    (Graduate School of Agriculture, Kyoto University)

  • Kenji Takeuchi

    (Graduate School of Economics, Kobe University)

  • Shunsuke Managi

    (Graduate School of Environmental Studies, Tohoku University)

This study investigates potential demand for infrastructure investment for alternative fuel vehicles (AFVs) by using a stated preference survey of 1,531 Japanese citizens. The potential demand is estimated on the basis of how much people are willing to pay for AFVs under different refueling scenarios. By using the estimated parameters, the economic efficiency of establishing battery exchange stations for electric vehicles is examined. The result indicates that infrastructural development of battery exchange stations can be socially efficient when the percentage of electric vehicle purchasers out of the total number of new vehicle purchasers exceeds 5.63%. Furthermore, in contrast to intuitive prediction, we found a complement relationship between the cruising ranges of AFVs and the infrastructures established. The result suggests that people with AFVs might change their total trip distance depending on the sufficiency of infrastructure investment.

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Paper provided by Graduate School of Economics, Kobe University in its series Discussion Papers with number 1207.

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Length: 32 pages
Date of creation: May 2012
Date of revision:
Handle: RePEc:koe:wpaper:1207
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  1. Brownstone, David & Bunch, David S & Train, Kenneth, 1999. "Joint mixed logit models of stated and revealed preferences for alternative-fuel vehicles," University of California Transportation Center, Working Papers qt45f996hh, University of California Transportation Center.
  2. Brownstone, David & Train, Kenneth, 1998. "Forecasting new product penetration with flexible substitution patterns," Journal of Econometrics, Elsevier, vol. 89(1-2), pages 109-129, November.
  3. Michael K. Hidrue & George R. Parsons & Willett Kempton & Meryl Gardner, 2011. "Willingness to Pay for Electric Vehicles and their Attributes," Working Papers 11-02, University of Delaware, Department of Economics.
  4. Calfee, John E., 1985. "Estimating the demand for electric automobiles using fully disaggregated probabilistic choice analysis," Transportation Research Part B: Methodological, Elsevier, vol. 19(4), pages 287-301, August.
  5. Louviere,Jordan J. & Hensher,David A. & Swait,Joffre D., 2000. "Stated Choice Methods," Cambridge Books, Cambridge University Press, number 9780521788304.
  6. Krinsky, Itzhak & Robb, A Leslie, 1986. "On Approximating the Statistical Properties of Elasticities," The Review of Economics and Statistics, MIT Press, vol. 68(4), pages 715-19, November.
  7. Bunch, David S. & Bradley, Mark & Golob, Thomas F. & Kitamura, Ryuichi & Occhiuzzo, Gareth P., 1993. "Demand for clean-fuel vehicles in California: A discrete-choice stated preference pilot project," Transportation Research Part A: Policy and Practice, Elsevier, vol. 27(3), pages 237-253, May.
  8. Hensher, David A. & Greene, William H., 2002. "Specification and estimation of the nested logit model: alternative normalisations," Transportation Research Part B: Methodological, Elsevier, vol. 36(1), pages 1-17, January.
  9. Beggs, S. & Cardell, S. & Hausman, J., 1981. "Assessing the potential demand for electric cars," Journal of Econometrics, Elsevier, vol. 17(1), pages 1-19, September.
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