Factors affecting drivers' willingness to pay for biofuels: the case of Italy

Abstract

Biofuels represent a promising alternative to substitute fossil fuels and, given the relevance of environmental impacts of the transport sector, policy initiatives worldwide aim at supporting the shift towards such cleaner energy source. Acknowledging the crucial role that biofuels will play in years to come in the energetic paradigm, the study aims at investigating key-determinants of drivers' willingness to pay for biofuels, focusing on a sample of 260 individuals from Northern Italy (n ¼ 260). In line with recent research on consumer behavior, socio-demographics are not good predictors of drivers' willingness to pay. Surprisingly, on the other hand, knowledge of the topic is negatively correlated to willingness to pay, so that the more people know about biofuels, the less they are willing to pay a premium price. Moreover, certification is not an effective tool to convince drivers of the eco-friendliness of biofuels, hence spurring willingness to pay. Possible explanations of the research findings as well as policy implications are discussed in detail, along with suggestions for future research on the topic.

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