Publication Detail

Is Premium Gasoline the Target Market for Methanol?


Presentation Series

Download PDF

Suggested Citation:
Sperling, Daniel, Winardi Setiawan, David Hungerford (1991) Is Premium Gasoline the Target Market for Methanol?. Institute of Transportation Studies, University of California, Davis, Presentation Series UCD-ITS-RP-91-09

Proceedings, International Association for Energy Economics, 14th Annual Conference, East-West Center, Honolulu, HI

A survey of vehicle owners was conducted in New York State and California to explore the market potential of methanol. Data on premium gasoline purchase behavior and willingness to pay for cleaner fuels and more power were collected. We found that drivers are willing to pay slightly more for cleaner fuels than for more power or more octane, although we do not interpret this to mean that when confronted at a fuel pump with two fuels, one cleaner but more expensive than the other, that a motorist would select the more expensive cleaner-burning fuel. Rather, motorists are willing to pay more, but only if everyone is paying more.

We found that income is not an important predictor of cleaner fuels, suggesting that environmental concerns cut across socio-economic groups. As expected, income is an important variable for explaining premium (high octane) gasoline purchase behavior, and even more important in explaining demand for more power. Consumer decisions are also sensitive to the type of car they drive (fuel injection, number of cylinders) and fuel prices. Gender and to some extent, respondents' domicile are significant variables in certain cases. We conclude that current premium gasoline buyers are likely to be the core group of buyers of methanol vehicles and fuels.