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Consumer Willingness to Pay for Vehicle Attributes: What Do We Know?
David Greene1, Anushah Hossain2, Julia Hofmann3
1University of Tennessee, Knoxville, 1640 Cumberland Avenue, Knoxville, TN, USA 37996, dgreen32@utk.edu.
Transportation Research. Part A, Policy and Practice
|December 4, 2018
Summary
Consumers value vehicle attributes like acceleration and fuel economy differently. This study reviews willingness to pay (WTP) for these attributes, finding significant variation and suggesting improvements for future research.
Area of Science:
- Environmental Economics
- Consumer Behavior
- Automotive Engineering
Background:
- Increasingly stringent vehicle emissions and fuel economy standards may necessitate tradeoffs with consumer-desired attributes like acceleration.
- Assessing consumer welfare impacts requires understanding the degree of these tradeoffs and consumer willingness to pay (WTP) for foregone benefits.
Purpose of the Study:
- To review literature and estimate marginal WTP (MWTP) for various vehicle attributes.
- To identify factors contributing to variation in MWTP estimates.
- To seek consensus estimates for WTP concerning fuel cost reduction and acceleration performance.
Main Methods:
- Systematic literature review of 52 U.S.-focused papers yielding MWTP values for 142 vehicle attributes.
- Analysis of variance (ANOVA) to explore factors influencing MWTP variation.
- Meta-analysis to determine consensus WTP estimates for fuel cost and acceleration.
Main Results:
- Identified 15 general groups of vehicle attributes with substantial variation in MWTP.
- Factors influencing MWTP explain only about one-third of the observed variation; research methodology significantly impacts estimates.
- Meta-analysis revealed differences in MWTP estimates for fuel cost based on data type and model specification; greater consistency found for acceleration MWTP.
Conclusions:
- Significant variation exists in consumer WTP for vehicle attributes, influenced by numerous factors and research methods.
- Further research is needed to refine understanding of consumer preferences and WTP for vehicle attributes, particularly regarding fuel economy and performance tradeoffs.
- Recommendations are provided for improving future WTP estimation methodologies in automotive consumer research.
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