Measuring willingness to pay for green options

Recent research findings from stated preference choice exercises across a number of transport and utility sectors examining willingness to pay for sustainable options are described. In transport, consumer choices relating to car ownership and use under an emission-based charging system were studied. Water and energy utilities were also included in the study. The issue of overstating the willingness to pay through the aggregating of values from multiple experiments where the group of variables related to environment and sustainability are jointly evaluated with other general groups of variables is explored. Similarly direct contingent valuations (stated intentions) which explore willingness to pay for the best possible service levels were examined. Both situations showed evidence of overstatement. It was also investigated whether stated preference exercises only capture the attitude to prefer sustainable options or if there is a definite trend showing linear / diminishing increase in willingness to pay proportional to the levels of improvement. The hypothesis that people have higher willingness to pay to compensate for improvements that relate to direct human externalities (e.g. the number of beaches affected by waste water disposal) compared to preventive measures (e.g. the use of renewable energy sources) was also tested and supported by the preliminary analysis. For the covering abstract see ITRD E145999