Consumer preferences for second-generation bioethanol

- Consumer data were collected via in-person surveys in Portland, Minneapolis, and Boston, in 2015.
- The mean willingness to pay for 2nd-generation biofuel was an 11% premium over conventional fuel.
- Factors affecting WTP included driving distance (negative) and organic purchases (positive).
- The effect of information about the 2nd-generation, nature-inspired process on WTP was positive.

This study investigates the consumer responses toward fuel from second-generation, nature-inspired lignocellulose processing systems. Data was collected via in-person consumer surveys across in three major U.S. cities with two different information treatments. A dichotomous-choice contingent valuation methodology is utilized to estimate consumers' willingness to pay for this product and analyze factors that affect consumer choice. The results suggest that the average respondent was willing to pay an 11% premium for second-generation nature-inspired bioethanol compared to conventional fuel. The willingness to pay was the highest in Portland, Oregon (17%), followed by Minneapolis (9%) and then Boston (8%). Driving distance was found to have a negative effect on consumer willingness to pay. Consumers who purchase more organic foods were more willing to pay a premium for the product. Risk attitude had heterogeneous effects in different locations. The effect of information regarding the second-generation, nature-inspired lignocellulose process was found to be significantly positive.