Changes of WTP with conditions variable: Analysis of consumers' preference about bio-ethanol blended gasoline
2008
Imoto, T.(Kyushu Univ., Fukuoka (Japan)) | Yabe, M. | Yokogawa, H.
For prevention of global warming, use of bio-ethanol has received considerable attention. The action of consumers purchasing bio-ethanol fuel can be considered as a willingness to pay (WTP) against global warming. The gasoline price, however, always changes, WTP for bio-ethanol fuel under a fixed gasoline price does not reflect the realities. We thus need to consider the variation of gasoline price for estimating WTP. Therefore, it is necessary to modify contingent variable method to take into account variation factor. In this study, we asked WTPs for E3 (3% bio-ethanol blended gasoline) under the three gasoline prices: 110yen, 120yen and 130yen, and estimated the patterns of WTPs. Based on the identified patterns of WTPs, consumers are separated into three groups: (1) people having no additional WTP against gasoline price, (2) people who decrease WTP when the gasoline price increases and (3) people who have constant WTP even when the gasoline price changes. Existence of the third group is first suggested by this analysis. Finally, we performed consumption simulation: When both gasoline and E3 are sold, the price of E3 setting 9yen higher than gasoline price maximizes the total sales price that yields 2-3% increment.
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