Italian Consumers’ Willingness to Pay for Eucalyptus Firewood

Abstract

Eucalyptus trees cover about 20 million hectares globally and are used to produce pulp, paper and firewood for domestic uses. From an environmental perspective, these trees have fewer impacts than other crops. In Italy, plantations of eucalyptus can provide a large amount of biomass to satisfy part of the country’s internal demand. However, eucalyptus cultivation is less profitable than cultivation of traditional crops due to the low market prices of wood. This study aims both to analyze the willingness of a sample of Italian consumers to pay for eucalyptus firewood and to investigate the main factors that may affect this willingness. Data are collected from a sample of 231 consumers using a web-based survey. The double-bounded dichotomous choice contingent valuation model is then applied. The findings show that information, the energetic density of firewood, consumers’ interest in environment issues, and the age of respondents are aspects that are positively associated with respondents’ willingness to pay for eucalyptus firewood. Conversely, interest in both firewood species and packaging are factors that reduce consumer willingness to pay for eucalyptus firewood. Even though these results cannot be generalized to the whole Italian population, the findings may indicate new opportunities for eucalyptus, while growing demand for eucalyptus could offer an interesting opportunity for firms to enter the sector and develop marketing strategies targeted towards specific market niches.