Are consumers willing to pay more for green innovations? Insights from the air transport industry

Abstract

This research investigates whether consumers are willing to pay more for green innovations. As green innovations are often more complex and costly to develop or operate than are conventional innovations, it is important to assess whether consumers truly value the environmental benefits associated with green innovations. Focusing on the specific case of the air transport industry, we investigate whether air passengers are willing to pay more for greener flights (i.e., using new technologies that have lower greenhouse gas emissions). To do so, we conduct a choice-based conjoint (CBC) analysis in which respondents are confronted with several product profiles for a plane ticket. The sample comprises 17,325 choices made by 1155 respondents from North America, Europe, Asia and Oceania. The results reveal passengers’ willingness-to-pay (WTP) (in euros) to switch from traditional jet fuel to different technological options that emit fewer greenhouse gas emissions than does kerosene. The results also investigate whether passengers are willing to accept longer flight times, which is an alternative operational method for reducing CO2 emissions. Additional analyses reveal that attitudes toward air transport (flight shame and trust in the aviation industry) and general pro-environmental attitudes and behaviors increase the WTP of passengers for greener innovations, while sociodemographics (age, gender and education) have no significant impact on WTP. This research extends the literature on green innovation by underlining the importance of its social acceptance and by highlighting under which circumstances consumers are willing to pay more for green innovations.