Household Demand and Willingness to Pay for Clean Vehicles

Published In: Transportation Research Part D, v. 12, no. 4, 2007, p. 264-274

Posted on on January 01, 2007

by Dimitris Potoglou, Pavlos S. Kanaroglou

This paper examines the factors and incentives that are most likely to influence households' choice for cleaner vehicles in the metropolitan area of Hamilton, Canada. Data collection is based on experimental design and stated choice methods through an Internet survey. Choice alternatives included a conventional gasoline, a hybrid and an alternative fuelled vehicle. Each option is described by a varying set of vehicle attributes and economic incentives, customized per respondent. Controlling for individual, household and dwelling-location characteristics, parameters of a nested logit model indicates that reduced monetary costs, purchase tax relieves and low emissions rates would encourage households to adopt a cleaner vehicle. On the other hand, incentives such as free parking and permission to drive on high occupancy vehicle lanes with one person in the car were not significant. Furthermore, limited fuel availability is a concern when households considered the adoption of an alternative fuelled vehicle. Finally, willingness-to-pay extra for a cleaner vehicle is computed based on the estimated parameters.

Research conducted by

This report is part of the RAND Corporation External publication series. Many RAND studies are published in peer-reviewed scholarly journals, as chapters in commercial books, or as documents published by other organizations.

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.