Exploring the drivers' side of the “blend wall”: U.S. consumer preferences for ethanol blend fuels

Francisco Aguilar, Zhen Cai, Phillip Mohebalian and Wyatt Thompson

Energy Economics, 2015, vol. 49, issue C, 217-226

Abstract: Analysis of stated preferences from over 2300 U.S. respondents shows that general attitudes nationwide favor the use of ethanol as a motor fuel but a sizeable segment (~20%) indicated strong unwillingness to buy ethanol blend fuels. Results from a discrete choice experiment analyzed using mixed logit regressions show that, all else constant, price-per-gallon and miles-per-gallon dominated preferences for fuel attributes but ethanol content made the average consumer more likely to choose a blend fuel. Findings provide strong evidence of heterogeneity in preferences driven by attitudes but also affected by age and income. At a point of price per mile equivalence for ethanol and gasoline, in a market where gasoline, E20 and E85 were available with no regulatory, supply or technological constraints, E85 would dominate market share. In this case ethanol would account for 56% of volume of motor fuels consumed. Our results show a high level of consumer substitutability of gasoline with ethanol and willingness to choose high ethanol blend fuels – which could help expand ethanol use beyond the current regulatory and technological limits of the blend wall.

Keywords: Ethanol fuel blends; Choice-based model; Mixed effects logistic regression; Market share analysis; U.S. (search for similar items in EconPapers)
JEL-codes: C35 C83 D12 Q01 Q21 Q42 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:49:y:2015:i:c:p:217-226

DOI: 10.1016/j.eneco.2015.01.019

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