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Consumer Preferences for Alternative Fuel Vehicles: A Discrete Choice Analysis

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  • 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))

Abstract

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.

Suggested Citation

  • Hackbarth, André & Madlener, Reinhard, 2011. "Consumer Preferences for Alternative Fuel Vehicles: A Discrete Choice Analysis," FCN Working Papers 20/2011, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
  • Handle: RePEc:ris:fcnwpa:2011_020
    Note: revised December 2012
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Hackbarth, André & Madlener, Reinhard, 2016. "Willingness-to-pay for alternative fuel vehicle characteristics: A stated choice study for Germany," Transportation Research Part A: Policy and Practice, Elsevier, vol. 85(C), pages 89-111.
    2. Anders Jensen & Elisabetta Cherchi & Juan Dios Ortúzar, 2014. "A long panel survey to elicit variation in preferences and attitudes in the choice of electric vehicles," Transportation, Springer, vol. 41(5), pages 973-993, September.
    3. Rohlfs, Wilko & Madlener, Reinhard, 2011. "Multi-Commodity Real Options Analysis of Power Plant Investments: Discounting Endogenous Risk Structures," FCN Working Papers 22/2011, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    4. Alexandros Dimitropoulos, 2014. "The Influence of Environmental Concerns on Drivers’ Preferences for Electric Cars," Tinbergen Institute Discussion Papers 14-128/VIII, Tinbergen Institute.
    5. Xingping Zhang & Rao Rao & Jian Xie & Yanni Liang, 2014. "The Current Dilemma and Future Path of China’s Electric Vehicles," Sustainability, MDPI, Open Access Journal, vol. 6(3), pages 1-27, March.
    6. Francisco J. Bahamonde-Birke, 2015. "Does Transport Behavior Influence Preferences for Elektromobility? An Analysis Based on Person- and Alternative-Specific Error Components," Discussion Papers of DIW Berlin 1529, DIW Berlin, German Institute for Economic Research.
    7. Francisco J. Bahamonde-Birke & Tibor Hanappi, 2015. "The Potential of Electromobility in Austria: An Analysis Based on Hybrid Choice Models," Discussion Papers of DIW Berlin 1472, DIW Berlin, German Institute for Economic Research.

    More about this item

    Keywords

    choice model; Alternative fuel vehicles; Willingness-to-pay; Mixed logit model; Scenario analysis;

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • M38 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Government Policy and Regulation
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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