South Korean consumers’ preferences for eco-friendly gasoline sedans: Results from a choice experiment survey

Abstract

The South Korean government is considering eco-friendly gasoline sedans with 2,000 cc engine as a promising future form of transportation and is tightening regulations on current gasoline sedans to reduce air pollutant emissions. This article attempts to look into consumers' preferences for the attributes of an eco-friendly gasoline sedan with 2,000 cc engine compared to a conventional gasoline sedan with 2,000 cc engine. The three attributes for a gasoline sedan chosen in this study are: decrease in greenhouse gas (GHG) emissions, abatement in particulate matter emissions, and improvement of fuel efficiency. The potential consumers’ trade-offs between each of the attributes and purchasing price for it were evaluated in a choice experiment (CE) survey of 1,000 people during August 2018. The CE data were examined by a Bayesian approach to the mixed logit model. The marginal values for a 1 point of percentage decrease in GHG emissions, a 1 point of percentage abatement in particulate matter emissions, and a 1 km/L improvement of fuel efficiency are computed to be KRW 257 thousands (USD 229), KRW 340 thousands (USD 303), and KRW 491 thousands (USD 438), respectively. These results can be useful for policy-making and decision-making regarding eco-friendly gasoline sedans. For example, they can provide information on how much value potential consumers place on a new eco-friendly gasoline sedan.