Households’ Willingness to Pay for Biofuel Gel in Lagos State, Nigeria: A Contingent Valuation Study

Abstract

The study was carried out to determine the willingness to pay (WTP) for Biofuel gel among households in Lagos State, Nigeria. A total of one hundred and seventy-five households using multiple sampling procedure were interviewed using a well-structured questionnaire. Data were analysed using descriptive statistics and Logit regression model. The study showed that the mean willingness to pay for Biofuel gel was ₦280 (US $0.78) per litre. The study further revealed that there was significant relationship between the socio-economic characteristics of the households and their willingness to pay for biofuel gel. Variables such as bid amount and household income had significant effect on the willingness to pay for biofuel at 1%. Bid amount had a negative coefficient of -0.0233655 on willingness to pay for biofuel gel. The study therefore recommends that price policies can be implemented in the form of price subsidies to foster the consumption of biofuel gel (clean fuels) in the study area, as respondents are more sensitive when it comes to their wallets and had identified high cost of the product as a major constraint for not consuming biofuel gel.