Analysis of Willingness to Pay Toward Green Products

Abstract

Plastic waste is a waste that difficult to decompose. Consumer awareness to behave environmentally friendly consumption becomes very important. This study aims to analyze the Willingness to Pay (WTP) value of consumer households in Surabaya City on green products and the determinants of the WTP. This study uses primary data from 100 respondents who were analyzed using the Contingent Valuation Method and Binary Logistics Regression. The results show the average maximum WTP value varies depending on the product’s type offered. The perception of the green products' price and the behavior of considering environmental issues in the buying process have a significant positive effect on WTP. The implications of this study are Government regulations and socialization are needed to increase awareness of environmentally friendly behavior for the community. Producers are expected to increase the variety of the green product and expand their distribution area so the products can be more easily obtained by consumers.