Consumer Willingness to Pay for Energy Conservation: A Comparison between Revealed and Stated Preference Method

Abstract

Abstract The path of increasing carbon emissions and global warnings has called public attentions to its impacts on economic activity. Much attention has been on the issues of the energy uses. This also leads to concern whether consumers prefer to buy energy efficiency products in the market. In this study, by using the hedonic price method, we estimate the impact of energy efficiency standard as well as energy efficiency label on prices on the demand of air- conditioners in Taiwan. Our empirical results indicate that consumers are willing to pay more amounts on the products with higher energy-efficient ratio or with the energy efficiency label. Furthermore, by using the contingent valuation method, the estimation results of consumer willingness to pay for energy conservations are similar to those estimated by the hedonic price method.