To fully automate or not? Investigating demands and willingness to pay for autonomous vehicles based on automation levels

Abstract

We review the literature on the motivators of consumers’ purchasing decisions regarding autonomous vehicles (AVs), focusing on environmental awareness, vehicle types, concerns about accidents, and merits. The willingness to buy (WTB) and willingness to pay (WTP) for AVs have been extensively studied. However, it is imperative to broaden the outlook and consolidate the existing knowledge base. Although the WTB and WTP for AVs have been studied, automation-level preferences have been underresearched. Based on more than 150,000 observations, we construct a choice model and calculate the WTP for each level of automation. Our results show that there is a disparity between people's WTB and WTP according to the automation level. In particular, we find that the coefficients regarding FAVs’ benefits and accidents significantly exceed those related to environmental concerns. Such results indicate that practical benefits and concerns influence AV demand and WTP to a greater extent than environmental awareness. Our model results indicate a disparity between WTB and WTP for AVs that mostly derives from the different types of environmental concerns, concerns about accidents, and perceived benefits from these automobiles. Our results urge policies according to which governments and companies closely examine consumers who exhibit WTB-WTP disparities. Issues relating to demand patterns, WTP, and a suitable policy framework are discussed.