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Sustainability 2017, 9(5), 814; doi:10.3390/su9050814

Consumers’ Willingness to Pay a Premium for Eco-Labeled LED TVs in Korea: A Contingent Valuation Study

Department of Energy Policy, Graduate School of Energy & Environment, Seoul National University of Science & Technology, 232 Gongreung-Ro, Nowon-Gu, Seoul 01811, Korea
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Academic Editor: Gerrit Antonides
Received: 31 January 2017 / Revised: 26 April 2017 / Accepted: 4 May 2017 / Published: 13 May 2017
(This article belongs to the Special Issue Sustainable Consumer Behavior)
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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. View Full-Text
Keywords: eco-labeled LED TV; consumer preference; willingness to pay; premium; contingent valuation eco-labeled LED TV; consumer preference; willingness to pay; premium; contingent valuation
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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MDPI and ACS Style

Min, S.-H.; Lim, S.-Y.; Yoo, S.-H. Consumers’ Willingness to Pay a Premium for Eco-Labeled LED TVs in Korea: A Contingent Valuation Study. Sustainability 2017, 9, 814.

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