# Consumer Preferences for Wood-Pellet-Based Green Pricing Programs in the Eastern United States
## 4 Results and Discussion
### Estimation of Binary Choice Task
\begin{table}
\begin{tabular}{c c c c c} \hline \hline  & \multicolumn{2}{c}{**Binary Logit**} & \multicolumn{2}{c}{**Calibrated Model (Certainty Scale 7 Cut Off)**} \\ \hline
**Attribute Level** & **Parameter Estimates** & **WTP (USD)** & **Parameter Estimates** & **WTP (USD)** \\ \hline M6 & 0.230 (0.042) *** & 17.13 & 0.341 (0.050) *** & 77.28 \\ M12 & 0.097 (0.044) ** & 7.25 & 0.306 (0.053) *** & 69.31 \\ FP & 0.122 (0.045) ** & 9.06 & 0.165 (0.054) ** & 37.37 \\ F5 & 0.077 (0.045) * & 5.74 & 0.112 (0.054) ** & 25.38 \\ NOPEN & 0.084 (0.036) ** & 6.28 & 0.151 (0.042) *** & 34.30 \\ INSTATE & 0.069 (0.036) * & 5.10 & 0.238 (0.042) *** & 54.03 \\ MED & 0.116 (0.045) ** & 8.61 & 0.273 (0.055) *** & 61.92 \\ HIGH & 0.209 (0.043) *** & 15.55 & 0.447 (0.506) *** & 101.33 \\ GP & \(-\)0.013 (0.001) *** & & \(-\)0.004 (0.001) ** & \\ No. of respondents & 2000 & & & \\ No. of Observations & 23,994 & & & \\ Log likelihood & \(-\)8237.32 & \(-\)12,016.41 & & \\ \hline \multicolumn{4}{c}{***, *, and * indicate statistical significance at the 1%, 5% and 10% levels, respectively. Values in parentheses show standard errors. The attribute levels (M24, F10, Pen, Outstate, Low) were the omitted/baseline variables.} \\ \end{tabular}
\end{table} 
Table 4: Results from binary choice logit model and calibrated model estimations with parameter estimates and WTP values for hypothetical wood pellet green energy programs. and [PERSON] [22] found that consumers prefer green power plants that are closer to their homes. [PERSON] et al. [48] had similar findings with consumers having an additional willingness to pay for local suppliers of 3.72 Eurocent/Kwh. They concluded that locally produced electricity may reduce information and enforcement costs, as consumers can easily monitor how their electricity is produced, thus creating trust. The level scale values used to measure length of contract suggest that longer contracts of 12 months (12 M) attract lower WTP as opposed to shorter contract lengths of 6 months (6 M) by up to USD 9.88. On the contrary, [PERSON] et al. [46], found that the contract length (cancellation period) had a minor influence on product choice whereas long-term price guarantee (a measure of variability) had some positive customer value. It is evident that even hypothetical green energy consumers are sensitive to financial commitments that are drawn over longer periods. For the carbon reduction (RC) attribute's levels, there was an increase in utility from (6-10%) MED to (11-20%) LOW of USD 6.94. This was an expected outcome, as respondents in all the Eastern states preferred GPPs that reduce carbon emission, given the fact that heightened global concern and the subsequent impetus to reduce global carbon emissions has successfully sensitized respondents on the importance of carbon emissions reduction. This outcome is consistent with other studies by [PERSON] et al. [47], [PERSON] et al. [37], and [PERSON] et al. [19] who used carbon emission reduction as an attribute. To adjust for the hypothetical bias (consequentiality) that is a common concern for stated preference WTP estimates, we applied a calibrated model as designed by [PERSON] and [PERSON] [42]. The calibrated model applies cut-off values for certainty scales ranging from seven to ten with an assumption that the real WTP is closer to the calibrated model. For our case, we applied a cut-off of seven (Table 4, column 4). The binary logit WTP values for our calibrated model are higher than the observed WTP values. This outcome is consistent with observations from [PERSON] and [PERSON] [42], which suggests that our WTP values were not over-estimated to surpass the real WTP. Furthermore, [PERSON] and [PERSON] [63] assert that the tendency for hypothetical WTP can overestimate real WTP. They caution that approaches for measuring consequentiality should be considered as complements and not substitutes.