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 KRW 29,007 (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 (KRW 750,000 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.

Thermal discharge emitted from the nuclear power plants located around coastal areas in order to acquire seawater for cooling has a negative impact on the marine environment and causes serious complaints from fishermen in Korea. This article tries to assess the environmental benefits of reducing thermal discharge through switching from nuclear power generation to combined heat and power (CHP) generation. Using a contingent valuation survey, we derive the additional willingness to pay (WTP) of 1000 households to switch the generation source from nuclear power to natural gas (NG)-based CHP in order to reduce the thermal discharge. We used the single-bounded dichotomous choice question to elicit WTP responses and employed the spike model to handle the zero WTP observations. The mean additional WTP for the switch is computed as KRW 63.9 (USD 0.06) per 1 kWh of electricity. This value has statistical significance at the 1% level and amounts to about 51% of the average price for electricity (KRW 125.1 or USD 0.1). This finding implies that the public are ready to shoulder a significant financial burden to reduce thermal discharge through switching from nuclear power to NG-based CHP. This value can be interpreted as an external cost of nuclear power or an external benefit of the switch in terms of reducing the thermal discharge.

No abstract

No abstract

No abstract