Evaluation of a consumer incentive program for an energy-efficient product in South Korea

Because green products are expected to reduce environmental pollution, save natural resources, and protect public health, they are regarded as a useful instrument of sustainable economic growth. Although many policies exist to promote the purchase of green products, their successful adoption requires the voluntary participation of individual consumers and the implementation of an appropriate incentive system. This study presents an ex ante evaluation of consumer preferences when faced with an incentive program that aims to promote the purchase of green products, specifically an energy-efficient LCD television. By using a conjoint analysis with a mixed logit model, we explore the effects of the incentive program on electric power consumption and the consequential reduction in greenhouse gas emissions in South Korea. Our simulation results suggest that when a consumer receives both 5 % of the purchase price of the green product in the form of “incentive points” and a one-million Korean won income tax deduction, the electric power consumption of LCD televisions nationwide will reduce by 50 GWh, thus reducing overall CO₂ emissions by 21,200 t.