Potential for Widespread Use of Bioethanol in the Car Rental Business Sector in Okinawa, Japan

Abstract

The purpose of this study was to assess the potential for widespread use of bioethanol-blended gasoline in the rental car market for tourists visiting Okinawa, Japan. A choice modeling approach (a random parameter logit model) was used to quantify the impact of the information on welfare change associated with changes in vehicle type, locally generated energy label, and prices attributes to a sample of Okinawa tourists. The results suggest that tourists have a more positive perception of cars fueled by bioethanol and electricity compared with those fueled by gasoline. The valuation of vehicles fueled by bioethanol was especially high compared with those fueled by electricity. Vehicles using bioethanol made from Okinawa-grown sugarcane and electricity generated from wind farms in Okinawa also received higher valuations. A broad range of tourists had a positive perception of vehicles fueled by bioethanol produced in Okinawa. These results suggest the potential for widespread use of bioethanol among tourists visiting Okinawa, and thus an expansion of clean energy owing to a view toward “local production for local consumption”.