 Household demand and willingness to pay for hybrid vehiclesYizao Liu () Energy Economics, 2014, vol. 44, issue C, 191-197 Abstract: This paper quantitatively evaluates consumers' willingness to pay for hybrid vehicles by estimating the demand of hybrid vehicles in the U.S. market. Using micro-level data on consumer purchases of hybrid and non-hybrid vehicles from National Household Travel Survey 2009, this paper formulates a mixed logit model of consumers' vehicle choices. Parameter estimates are then used to evaluate consumers' willingness to pay for hybrids. Results suggest that households' willingness to pay for hybrids ranges from $963 to $1718 for different income groups, which is significantly lower than the average price premium (over $5000) of hybrid vehicles, even when taking the fuel costs savings of hybrid vehicles into consideration. The differences reveal that although the market has shown increasing interest in hybrid vehicles, consumers' valuation of the hybrid feature is still not high enough to compensate for the price premium when they make new purchases. Policy simulations are conducted to examine the effects of raising federal tax incentives on the purchase of hybrid vehicles. Keywords: Willingness to pay; Fuel economy; Hybrid vehicles; Tax incentives (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:44:y:2014:i:c:p:191-197 DOI: 10.1016/j.eneco.2014.03.027 Access Statistics for this article Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant More articles in Energy Economics from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.