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Washington State University study finds people willing to pay more for new biofuels


An analysis by Washington State University (WSU) revealed that when it comes to second generation biofuels consumers in USA were willing to pay a premium of approximately 11 percent over conventional fuel

By Team ABLE

A convincing analysis by Washington State University (WSU) has shown that when it comes to second generation biofuels consumers are willing to pay a premium of approximately 11 percent over conventional fuel.

\"We were surprised the premium was that significant,\" said Jill McCluskey, WSU professor in the School of Economic Sciences. \"We wanted to study people in different regions of the country, to make sure we weren\'t just getting a local result, and people in all three cities we studied said they would pay more for these fuels.\"

The paper, \"Consumer Preferences for Second-Generation Bioethanol,\" was published in November 2016 in the journal Energy Economics.

First generation biofuels use potential food sources, like corn, which can cause the price of food to rise. Second generation biofuels, on the other hand, are made from sustainable biological non-food sources. Recently, the report says, Alaska Airlines flew a plane from Seattle to Washington, DC, fueled by second generation biofuel made from wood scraps.

McCluskey\'s study was part of a grant from the National Science Foundation headed by Shulin Chen, WSU professor in the Department of Biological Systems Engineering. Chen, who researches new biofuels, asked McCluskey to find out whether people would buy second generation biofuels.

\"This new biofuel doesn\'t exist commercially yet, so we have to do these studies to make sure there\'s a potential market for it,\" McCluskey said. \"And this shows there clearly is a market.\"

The researchers asked participants if they would be willing to pay a certain amount for the product. If they said no, researchers offered a discount and asked if participants would pay that amount. However, if respondents said yes, researchers asked if they would be willing to pay a little more for the product. Before they were surveyed, half of the participants were given information about second generation biofuels. Those participants were more willing to pay a greater premium, which suggests that marketing the benefits of the new biofuels would improve consumers\' perceptions, McCluskey said.