Willingness to Pay for Biofuel Among Small-Scale Food Processors in Ibadan Metropolis, Nigeria

Abstract

Cooking takes the largest percentage of energy consumption and most households still depend on wood fuel energy, which contributes significantly to global warming. However, a major consideration for market infiltration of a green energy product is the willingness of consumers to pay for it. The study examined the determinants of willingness to pay for biofuel among small-scale food sellers in Ibadan metropolis. Primary data were collected from one hundred and fifty-five small-scale food sellers in Ibadan metropolis using a multi-stage sampling procedure. Data were analysed using descriptive statistics and probit regression. The majority of the food sellers were female (91.0%) with less than five household members (65.8%) and had tertiary education (40.0%). Most of them were not aware of biofuel (82.6%) but were willing to substitute firewood for biofuel (78.1%). The probability of willingness to pay for biofuel was increased by household size, being a female but reduced by bid at the unit price of ₦500 per litre. However, it was reduced by household size and education at ₦600 per litre. Based on the findings of this study, the entrepreneurs should take advantage of the emerging biofuel market by creating awareness of green energy and its benefits among the citizenry while government should support its production so that it can be sold at affordable price.