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The Willingness to Pay for Renewable Energy Sources: The Case of Italy with Socio-demographic Determinants

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  • Carlo Andrea Bollino

Abstract

According to the Renewable Sources EU Directive 2001/77/CE, the Italian Government goal is to attain the share of 22% in RES electricity production in 2010. In such context it becomes crucial to explore the existence of consumer's Willingness to Pay (WTP) in order to use renewable energy in the electricity production. This study is based on a national survey with 1601 interviews made, in Italy, in November 2006. My aim is twofold. Firstly, I wish to assess the consumer's WTP which is the basis for market sustainability of such energy policy goal and, secondly, I evaluate the share of the necessary public support to RES policy which is covered by the aggregate WTP of Italians. This is an implicit assessment of the plausibility/acceptance of the announced target policy. In my survey framework I obtain the consumer's WTP with two different approaches and to this end the sample has been divided in two parts. In the first sub-sample I propose the full price vector with a downward elicitation format while in the second sub-sample I use the same price vector with an upward elicitation format. In this paper I focus on the different uncertainty degree that affects respondent's choices. I take care econometrically of this issue using an individual stochastic valuation approach and a referendum approach. I obtain for most of the estimated models that estimates of WTP are in agreement with other international results. The aggregate WTP for RES in Italy, however, is (still) not enough to attain the Italian Government goal in 2010.

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Bibliographic Info

Article provided by International Association for Energy Economics in its journal The Energy Journal.

Volume (Year): Volume 30 (2009)
Issue (Month): Number 2 ()
Pages: 81-96

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Handle: RePEc:aen:journl:2009v30-02-a04

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Cited by:
  1. Peter Grösche & Carsten Schröder, 2010. "Eliciting Public Support for Greening the Electricity Mix Using Random Parameter Techniques," Ruhr Economic Papers 0233, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  2. Bigerna, Simona & Polinori, Paolo, 2014. "Italian households׳ willingness to pay for green electricity," Renewable and Sustainable Energy Reviews, Elsevier, vol. 34(C), pages 110-121.
  3. Amador, Francisco Javier & González, Rosa Marina & Ramos-Real, Francisco Javier, 2013. "Supplier choice and WTP for electricity attributes in an emerging market: The role of perceived past experience, environmental concern and energy saving behavior," Energy Economics, Elsevier, vol. 40(C), pages 953-966.
  4. Aravena, Claudia & Hutchinson, W. George & Longo, Alberto, 2012. "Environmental pricing of externalities from different sources of electricity generation in Chile," Energy Economics, Elsevier, vol. 34(4), pages 1214-1225.
  5. Komarek, Timothy M. & Lupi, Frank & Kaplowitz, Michael D., 2011. "Valuing energy policy attributes for environmental management: Choice experiment evidence from a research institution," Energy Policy, Elsevier, vol. 39(9), pages 5105-5115, September.
  6. Antonino Vaccaro & Dalia Patiño Echeverri, 2010. "Corporate Transparency and Green Management," Journal of Business Ethics, Springer, vol. 95(3), pages 487-506, September.
  7. Shin, Jungwoo & Woo, JongRoul & Huh, Sung-Yoon & Lee, Jongsu & Jeong, Gicheol, 2014. "Analyzing public preferences and increasing acceptability for the Renewable Portfolio Standard in Korea," Energy Economics, Elsevier, vol. 42(C), pages 17-26.
  8. Bigerna, Simona & Polinori, Paolo, 2011. "Italian consumers’ willingness to pay for renewable energy sources," MPRA Paper 34408, University Library of Munich, Germany.
  9. Ladenburg, Jacob & Lutzeyer, Sanja, 2012. "The economics of visual disamenity reductions of offshore wind farms—Review and suggestions from an emerging field," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(9), pages 6793-6802.

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