Abstract
Although the production costs and prices of eco-labeled products are higher than those of conventional ones, the use of greener products can lead to better environmental outcomes. Thus, the consumers' preferences for eco-labeled products should be investigated to understand the potential of markets with green products. This study attempts to examine the consumers' preference or willingness to pay (WTP) a premium for eco-labeled products using a specific case study of a 43-inch LED TV, which is a common home appliance in Korea. For this purpose, a contingent valuation survey of 1000 Korean consumers was conducted in June 2016. We used a one-and-one-half-bounded dichotomous choice question to derive the additional WTP responses and a spike model to analyze zero additional WTP responses. The mean additional WTP a premium for the eco-labeled 43-inch LED TV is estimated to be KRW29,007 (USD 24.8), which is statistically meaningful at the 1% level. This value amounts to 3.9% of the price of a conventional 43-inch LED TV (KRW750,000 or USD 640.5) and can be interpreted as the external benefit of an eco-labeled LED TV. We can conclude that Korean consumers are ready to pay a significant premium for eco-labeled LED TVs. Moreover, we examined the consumer's characteristics that affect the probability that the person will be willing to pay a premium for an eco-labeled LED TV and found that it would be effective to set high-income, older, highly-educated, and female consumers with children as marketing targets.
Original language | English |
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Article number | 814 |
Journal | Sustainability (Switzerland) |
Volume | 9 |
Issue number | 5 |
DOIs | |
State | Published - 13 May 2017 |
Keywords
- Consumer preference
- Contingent valuation
- Eco-labeled LEDTV
- Premium
- Willingness to pay