Fuel economy valuation and preferences of Indian two-wheeler buyers

Abstract India has experienced exponential growth in sales of two-wheelers due to their high fuel economy and easy manoeuvrability congested traffic conditions. Understanding Indian consumers’ valuation while purchasing a two-wheeler is crucial evaluate whether buyers are myopic with regards future costs. However currently, there exists no quantification the value that ascribe economy. We address this gap literature by analyzing revealed preference survey data from more than 8000 respondents across India, who purchased new 2018. Discrete choice models, including standard conditional logit flexible mixed logit, used infer estimates discount rate consumers apply obtain present operating cost at time purchase. The results indicate annual below 10% for monthly household incomes above 15,000 rupees (∼US$215 2018; ∼73% sample). Mixed suggests substantial heterogeneity rates given income level. median mixing distribution close estimates, which leads conclusion an average buyer ascribes savings. Besides, our analysis provides various insights into preferences. For instance, style/looks, economy, comfort, brand (in decreasing order) top four factors influence purchase decisions consumers.