Consumer willingness to pay for appliances produced by Green Power Partners

The U.S. Environmental Protection Agency's Green Power Partnership (GPP), has over 1200 members purchasing nearly 18 billion kilowatt hours of green power annually. One possible motivation for firms to join the GPP is to raise their reputation for environmental quality among consumers. This research investigates the extent to which consumer preferences for a residential appliance are affected by information on whether or not the appliance manufacturer was a member of the GPP. Data for the study were obtained from a contingent choice exercise in an online survey of a national sample of adults. The results suggest that consumers are, on average, willing to pay an extra $48.52 to $70.95 for a refrigerator manufactured by a company that is a member of the GPP. These amounts appear to generally exceed the additional costs associated with using green power to manufacture a refrigerator and suggest that GPP could effectively be used to market consumer products.