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Consumer Preferences for Alternative Fuel Vehicles: A Discrete Choice Analysis

  • Hackbarth, André

    ()

    (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))

  • Madlener, Reinhard

    ()

    (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))

In this paper we analyze the potential demand for privately used alternative fuel vehicles (AFVs), based on a nationwide survey in Germany among (potential) car buyers. For this purpose, we applied a stated preference discrete choice experiment, using a wide range of vehicle alternatives (gasoline/diesel, natural gas, hybrid, plug-in hybrid, electric, biofuel, hydrogen) and vehicle attributes. By applying both a multinomial logit model and a mixed (error components) logit model, we estimate the attributes’ influence on vehicle choice and calculate consumers’ willingness-to-pay for the improvement of these attributes. Furthermore, in a scenario analysis, we simulate the impact of monetary and non-monetary policy measures on vehicle choice probabilities. We find that the most promising target group for the adoption of all kinds of AFVs is that of younger, well-educated, and environmentally aware car buyers, who, in the case of electric vehicles, also have the possibility to plug-in their car at home, and who have a high share of city trips and thus need a small car. Moreover, we find that, depending on the vehicle alternative, environmental awareness, and budget constraints for the next vehicle purchase, households are willing to pay substantial amounts for the improvement of fuel cost, driving range, charging infrastructure, CO2 emissions, vehicle tax exemptions, and free parking or bus lane access. Furthermore, the scenario results suggest that conventional vehicles will maintain their dominance in the market, whereas electric and hydrogen vehicles will remain unpopular. The market share of the latter is only expected to rise markedly if massive and multiple policy interventions are implemented. Finally, we find evidence that an increase in the fully electric vehicle’s driving range to a level comparable with all other vehicle alternatives has the same impact on its choice probability as would a market-based, multiple measures policy intervention package.

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Paper provided by E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN) in its series FCN Working Papers with number 20/2011.

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Length: 49 pages
Date of creation: Dec 2011
Date of revision:
Handle: RePEc:ris:fcnwpa:2011_020
Note: revised December 2012
Contact details of provider: Web page: http://www.eonerc.rwth-aachen.de/fcnEmail:


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  1. Brownstone, David & Train, Kenneth, 1999. "Forecasting new product penetration with flexible substitution patterns," University of California Transportation Center, Working Papers qt1j6814b3, University of California Transportation Center.
  2. 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.
  3. Dagsvik, John K. & Wennemo, Tom & Wetterwald, Dag G. & Aaberge, Rolf, 2002. "Potential demand for alternative fuel vehicles," Transportation Research Part B: Methodological, Elsevier, vol. 36(4), pages 361-384, May.
  4. 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.
  5. Daziano, Ricardo A. & Achtnicht, Martin, 2012. "Forecasting adoption of ultra-low-emission vehicles using the GHK simulator and Bayes estimates of a multinomial probit model," ZEW Discussion Papers 12-017, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  6. Achtnicht, Martin, 2012. "German car buyers' willingness to pay to reduce CO2 emissions," ZEW Discussion Papers 09-058 [rev.], ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  7. Horne, Matt & Jaccard, Mark & Tiedemann, Ken, 2005. "Improving behavioral realism in hybrid energy-economy models using discrete choice studies of personal transportation decisions," Energy Economics, Elsevier, vol. 27(1), pages 59-77, January.
  8. Mau, Paulus & Eyzaguirre, Jimena & Jaccard, Mark & Collins-Dodd, Colleen & Tiedemann, Kenneth, 2008. "The 'neighbor effect': Simulating dynamics in consumer preferences for new vehicle technologies," Ecological Economics, Elsevier, vol. 68(1-2), pages 504-516, December.
  9. Caulfield, Brian & Farrell, Séona & McMahon, Brian, 2010. "Examining individuals preferences for hybrid electric and alternatively fuelled vehicles," Transport Policy, Elsevier, vol. 17(6), pages 381-387, November.
  10. Hidrue, Michael K. & Parsons, George R. & Kempton, Willett & Gardner, Meryl P., 2011. "Willingness to pay for electric vehicles and their attributes," Resource and Energy Economics, Elsevier, vol. 33(3), pages 686-705, September.
  11. 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.
  12. 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.
  13. Axsen, Jonn & Mountain, Dean C. & Jaccard, Mark, 2009. "Combining stated and revealed choice research to simulate the neighbor effect: The case of hybrid-electric vehicles," Institute of Transportation Studies, Working Paper Series qt02n9j6cv, Institute of Transportation Studies, UC Davis.
  14. Axsen, Jonn & Mountain, Dean C. & Jaccard, Mark, 2009. "Combining stated and revealed choice research to simulate the neighbor effect: The case of hybrid-electric vehicles," Resource and Energy Economics, Elsevier, vol. 31(3), pages 221-238, August.
  15. Kenneth Train, 2003. "Discrete Choice Methods with Simulation," Online economics textbooks, SUNY-Oswego, Department of Economics, number emetr2, September.
  16. Ziegler, Andreas, 2012. "Individual characteristics and stated preferences for alternative energy sources and propulsion technologies in vehicles: A discrete choice analysis for Germany," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(8), pages 1372-1385.
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