Individual Characteristics and Stated Preferences for Alternative Energy Sources and Propulsion Technologies in Vehicles: A Discrete Choice Analysis

CER-ETH - Center of Economic Research at ETH Zurich, Working paper No. 10/125

34 Pages Posted: 7 Apr 2010

See all articles by Andreas Ziegler

Andreas Ziegler

ETH Zürich - Department of Management, Technology, and Economics (D-MTEC); University of Zurich

Date Written: March 2010

Abstract

This paper empirically examines the determinants of the demand for alternative energy sources and propulsion technologies in vehicles. The data stem from a stated preference discrete choice experiment with 598 potential car buyers. In order to simulate a realistic automobile purchase situation, seven alternatives were incorporated in each of the six choice sets, i.e. hybrid, gas, biofuel, hydrogen, and electric as well as the common fuels gasoline and diesel. The vehicle types were additionally characterized by a set of attributes, such as purchase price or motor power. Besides these vehicle attributes, our study particularly considers a multitude of individual characteristics, such as socio-demographic and vehicle purchase variables. The econometric analysis with multinomial probit models identifies some population groups with a higher propensity for alternative energy sources or propulsion technologies in vehicles, which can be focused by policy and automobile firms. For example, younger people and people who usually purchase environment-friendly products have a higher stated preference to purchase biofuel, hydrogen, and electric automobiles than other population groups. Methodologically, our study highlights the importance of the inclusion of taste persistence across the choice sets. Furthermore, it suggests a high number of random draws in the Geweke-Hajivassiliou-Keane simulator, which is incorporated in the simulated maximum likelihood estimation and the simulated testing of statistical hypotheses.

Keywords: Alternative energy sources and propulsion technologies in vehicles, stated preferences, discrete choice, multinomial probit models, unobserved heterogeneity, simulated maximum likelihood estimation

JEL Classification: R41, C25, C15, Q54, Q58

Suggested Citation

Ziegler, Andreas, Individual Characteristics and Stated Preferences for Alternative Energy Sources and Propulsion Technologies in Vehicles: A Discrete Choice Analysis (March 2010). CER-ETH - Center of Economic Research at ETH Zurich, Working paper No. 10/125, Available at SSRN: https://ssrn.com/abstract=1585142 or http://dx.doi.org/10.2139/ssrn.1585142

Andreas Ziegler (Contact Author)

ETH Zürich - Department of Management, Technology, and Economics (D-MTEC) ( email )

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