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Willingness-to-Pay for Alternative Fuel Vehicle Characteristics: A Stated Choice Study for Germany

Author

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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 the light of European energy efficiency and clean air legislations, as well as an ambitious electric mobility goal of the German government, we examine consumer preferences for alternative fuel vehicles (AFVs), based on a Germany-wide discrete choice experiment among 711 potential car buyers. We estimate consumers’ willingness-to-pay (WTP) and contingent variation (CV) for improvements in vehicle purchase price, fuel cost, driving range, refueling infrastructure, CO2 emissions and governmental monetary and non-monetary incentives, hereby accounting for diminishing marginal returns for some of the attributes and taking taste differences in the population into account by applying a latent class model with 6 distinct consumer segments. Our results indicate that almost 36% of the consumers are open-minded towards at least one AFV option, with 15% being AFV-affine insomuch that they show a high probability of choosing AFVs despite their current shortcomings. Our results suggest that German car buyers’ WTP for improvements of the various vehicle attributes varies considerably across consumer segments and that the vehicle features have to meet some minimum requirements so that AFVs are shortlisted. Furthermore, the CV values show that decision-makers in the administration and industry should focus on the most promising consumer group of ‘AFV aficionados’ and their needs, that some vehicle attribute improvements could increase AFV demand rather cost-effectively, and that consumers would accept surcharges for some vehicle attributes at a level, which could enable their economic provision and operation (e.g. fast-charging infrastructure), while others might need governmental subsidies to substitute the insufficient consumer WTP (e.g. battery capacity).

Suggested Citation

  • Hackbarth, André & Madlener, Reinhard, 2013. "Willingness-to-Pay for Alternative Fuel Vehicle Characteristics: A Stated Choice Study for Germany," FCN Working Papers 20/2013, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
  • Handle: RePEc:ris:fcnwpa:2013_020
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    More about this item

    Keywords

    Discrete choice; Stated preferences; Latent class model; Alternative fuel vehicles; Germany; Electric mobility; Willingness-to-pay; Contingent variation;
    All these keywords.

    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
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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