E. Costa et al.1 3
1 Introduction
In September 2015, the second largest car manufacturer in the world was involved in a
massive scandal regarding vehicles’ emissions of substances that harm the environment
and human health. The German multinational known as Volkswagen Aktiengesellschaft
(hereafter Volkswagen or VW), allegedly broke the law by programming TDI engines
to activate emissions controls only during emission tests. This incident affected a large
number of models commercialised in Europe and in the USA. The scandal, known as
the Dieselgate because it concerned diesel-powered vehicles, emerged in the USA after
an inquiry by the International Council on Clean Transportation, and it quickly spread
to the rest of the world. Not only did it make a commotion in the automotive sector, but
it also reignited the debate about corporate social responsibility in modern economies.
Dieselgate attracted the attention of both traditional and social media for weeks, inspir-
ing the ire of numerous customers, governments and regulatory agencies; more broadly,
a larger population may have been damaged by the firm’s illegal conduct (Schmidt
2016). Discussion of this issue inspired us to reflect on the long-standing debate around
sustainable transport (Hinnen et al. 2017; Oberhofer and Dieplinger 2014) and the cru-
cial role of consumer choices in ensuring the viability of new sustainable transportation
systems (Poder and He 2017; Liu et al. 2017; Hackbarth and Madlener 2016).
Ethical consumerism has shown strong growth over the last decade: green products,
equality initiatives and eco-friendly labels have spread throughout a variety of markets
(Michaud and Llerena 2011; Sammer and Wüstenhagen 2006; Rowlands et al. 2003).
Within this broad stream of research, there is a large amount of empirical evidence for
consumer interest in “green/sustainable” transport and for the incorporation of such
matters into decision-making processes (Hinnen et al. 2017; Liu et al. 2017; Oberhofer
and Dieplinger 2014; Bazrbachi et al. 2017; Lane and Potter 2007; De Pelsmacker et al.
2005).
However, few studies have investigated the “demand” side of ethical commitment in
terms of the automobile industry (Poder and He 2017; Achtnicht 2012; Hackbarth and
Madlener 2016; Williander 2007; Hersch and Viscusi 2006); in particular, few studies
have sought to measure consumers’ willingness to pay (WTP hereafter) a premium price
for ethical product features.
In order to contribute to this debate, this paper aims to investigate consumers’ pur-
chase decision making by measuring their WTP a premium for lower CO 2 emitting vehi-
cles after Dieselgate. To do so, the study employs a discrete choice experiment among
278 Italian potential car buyers. Consumer WTP represents the amount an individual is
willing to pay in addition to the baseline price for a marginal decrease in baseline emis-
sions, without any change in utility (Achtnicht 2012).
Compared to previous studies in this field, our study contributes to the WTP for
“green transportation” debate (Poder and He 2017; Hinnen et al. 2017; Achtnicht 2012;
Williander 2007) by developing, with an exploratory intent, a discrete choice analysis of
potential car buyers in Italy. To the best of our knowledge, previous studies on the Euro-
pean market have privileged the French (Poder and He 2017), German (Hackbarth and
Madlener 2016; Achtnicht 2012) and UK contexts (Lane and Potter 2007). This study
represents the first exploratory research analysing the Italian market.
Because of its exploratory nature, this paper augments previous studies by providing
empirical insights into a different geographical market, Italy. Italy represents an interest-
ing setting because of the urgent need to better investigate and understand air pollution

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Consumers’ willingness to pay for green cars: a discrete choice analysis in Italy

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