Willingness to pay for a cleaner car: The case of car pollution in Quebec and France

Abstract

The problem of air pollution and greenhouse gas emissions is omnipresent today. Governments and civil society organizations are acting in concert to implement controls to limit the environmental consequences of human actions. The private sector is also changing, but it continues to lack strong incentives to initiate a substantial technological change in the direction of more “green products”. One argument used is the high cost of these technologies and individuals' limited willingness to pay for their benefits. The purpose of this paper is to establish, through a contingent valuation study, the value that Quebecers and French citizens attribute to a reduction in air pollution emitted from vehicles. To accomplish this objective, a price increase for less-polluting vehicles with similar performance as their more-polluting counterparts was proposed. Various econometric estimation methods were applied and corrections to the responses were made according to both the degree of certainty indicated in respondents' willingness to pay answers and the method of considering “Don't Know” answers. Results indicate a maximum willingness to pay of several thousand Canadian dollars (estimated between $3000 and $8000). The willingness to pay is also higher in France than in Quebec.