Upper Midwestern U.S. consumers and ethanol: Knowledge, beliefs and consumption

This study uses multivariate statistical methods to explore the beliefs of upper Midwestern U.S. residents about global climate change, and possible consumer responses to determine their willingness to pay more for cellulosic ethanol from multiple feedstocks. A mail survey was sent to residents of Michigan, Minnesota, and Wisconsin to determine baseline knowledge, attitudes and beliefs on several aspects of these issues, with a focus on the emerging market for cellulosic ethanol. First, survey responses were compiled and principal components analysis was used to reduce the dimensionality of the data. This resulted in seven factors and a theoretical framework to help understand consumers' beliefs about climate change and possible energy policy responses. Second, these results were combined with insights from previous studies that were used as input for further research hypotheses and multivariate analyses. The factor scores from principal components analysis along with the some of the key control variables (i.e., gender, income, and rural/urban) served as independent variables in three revised multiple regression models of consumer's willingness to pay (WTP) their fair share of any additional cost of cellulosic ethanol, as reported in an earlier study. Four explanatory variables were found to be significant determinants of WTP in every model: environment, energy consumption, and climate change; concerns about climate change impacts; inability to stop climate change; and gasoline prices and consumption. These results suggest strong public support and consumer WTP for cellulosic ethanol production in the region.