Consumers’ Willingness to Pay a Premium for Eco-Labeled LED TVs in Korea: A Contingent Valuation Study
Seo-Hyeon Min (),
Seul-Ye Lim () and
Seung-Hoon Yoo ()
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Seo-Hyeon Min: Department of Energy Policy, Graduate School of Energy & Environment, Seoul National University of Science & Technology, 232 Gongreung-Ro, Nowon-Gu, Seoul 01811, Korea
Seul-Ye Lim: Department of Energy Policy, Graduate School of Energy & Environment, Seoul National University of Science & Technology, 232 Gongreung-Ro, Nowon-Gu, Seoul 01811, Korea
Sustainability, 2017, vol. 9, issue 5, 1-12
Although the production costs and prices of eco-labeled products are higher than those of conventional ones, the use of greener products can lead to better environmental outcomes. Thus, the consumers’ preferences for eco-labeled products should be investigated to understand the potential of markets with green products. This study attempts to examine the consumers’ preference or willingness to pay (WTP) a premium for eco-labeled products using a specific case study of a 43-inch LED TV, which is a common home appliance in Korea. For this purpose, a contingent valuation survey of 1000 Korean consumers was conducted in June 2016. We used a one-and-one-half-bounded dichotomous choice question to derive the additional WTP responses and a spike model to analyze zero additional WTP responses. The mean additional WTP a premium for the eco-labeled 43-inch LED TV is estimated to be KRW 29,007 (USD 24.8), which is statistically meaningful at the 1% level. This value amounts to 3.9% of the price of a conventional 43-inch LED TV (KRW 750,000 or USD 640.5) and can be interpreted as the external benefit of an eco-labeled LED TV. We can conclude that Korean consumers are ready to pay a significant premium for eco-labeled LED TVs. Moreover, we examined the consumer’s characteristics that affect the probability that the person will be willing to pay a premium for an eco-labeled LED TV and found that it would be effective to set high-income, older, highly-educated, and female consumers with children as marketing targets.
Keywords: eco-labeled LED TV; consumer preference; willingness to pay; premium; contingent valuation (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:9:y:2017:i:5:p:814-:d:98569
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