Title: Consumer preferences for alternative fuel vehicles in South Korea

Authors: Yeonbae Kim, Gicheol Jeong, Jiwoon Ahn, Jeong-Dong Lee

Addresses: Technology Management, Economics and Policy Program, 37–318, College of Engineering, Seoul National University, San 56-1, Sillim-dong, Gwanak-gu, Seoul 151-744, Korea. ' Technology Management, Economics and Policy Program, 37–402, College of Engineering, Seoul National University, San 56-1, Sillim-dong, Gwanak-gu, Seoul 151-744, Korea. ' Korea Energy Economics Institute, Naeson 2-dong, Uiwang-si, Gyeonggi-do 437-713, Korea. ' Technology Management, Economics and Policy Program, 37–323, College of Engineering, Seoul National University, San 56-1, Sillim-dong, Gwanak-gu, Seoul 151-744, Korea

Abstract: The paper analyses consumer preferences for alternative fuel vehicles based on stated preference data gathered in South Korea. Five fuel type vehicles are considered in the analysis, and a mixed logit model using the Bayesian approach was used for the estimation. Estimation results show that preferences regarding fuel type and body type are heterogeneous, but preferences for cost variables and horsepower are relatively homogeneous across consumers. The results also show that an indirect network effect exists, influencing automobile demand. Simulation results show that diesel and hybrid vehicles will compete in the future for their shares of the market, with lower costs being the main source of competitiveness. Elasticity results show that fuel and maintenance costs are the most important factors influencing choice among alternative fuel vehicles and that an indirect network effect is important as well.

Keywords: alternative fuel vehicles; Bayesian approach; mixed logit; preference heterogeneity; consumer preferences; South Korea; alternative fuels; diesel vehicles; hybrid vehicles; hybrid electric vehicles; automotive technology; automobile industry; costs; indirect network effect.

DOI: 10.1504/IJATM.2007.017064

International Journal of Automotive Technology and Management, 2007 Vol.7 No.4, pp.327 - 342

Available online: 06 Feb 2008 *

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