Willingness to Pay for the Public Electric Bus in Nepal: A Contingent Valuation Method Approach

Abstract

The rapid increase in conventional diesel and gasoline vehicles in developing countries draws attention to clean energy vehicles, including electric buses. From socioeconomic and environmental perspectives, the benefits of electric buses are well described; however, there is a lack of studies to analyze the willingness to pay (WTP). This study aims to estimate 500 residents’ WTP in Pokhara Metropolitan City in Nepal, based on a contingent valuation method (CVM). The survey results show that 78% of respondents are willing to pay a special monthly tax for introducing electric buses in the city primarily due to the fact that electric buses are likely to be helpful to the environment (82.3%). Using the logistic regression analysis, it is estimated that the mean WTP is 758.6 NPR per person, with the most influencing factors of ‘willingness to ride electric buses for free’ and ‘the average usage of the main transportation per week’. The variables that show a positive relationship with the WTP are ‘the average usage of the main transportation per week’, ‘willingness to ride electric buses for free’, and ‘age’. The variable that negatively correlates with the WTP is ‘age’. The study’s findings provide references for developing funding options and budgeting plans for local policymakers.