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On the construct validity of measures of willingness to pay for green electricity: Evidence from a South African case

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  • Chan, Kai-Ying
  • Oerlemans, Leon A.G.
  • Volschenk, Jako

Abstract

The price consumers are willing to pay (WTP) extra for green electricity (GE) is one of the uncertainties possibly impacting on the overall feasibility of its market introduction. In the literature, several measurements of WTP are used. However, the number of studies comparing WTP measures is limited. This study investigates the construct validity (convergent and theoretical) of two widely used WTP measures (double-bounded dichotomous choice (DC) and open-ended (OE)). A model informed by the well-known theory of planned behaviour was applied to survey data from 890 South African domestic energy users. It was found that convergent validity among the WTP measures was fairly low. Moreover, results from Tobit regressions showed that a grounded theoretical model yields statistically significant results. However, different independent variables emerge in the DC and OE models. Therefore, the theoretical validity of one of the WTP measures seems to be low. The paper proposes a number of explanations for the low construct validity observed.

Suggested Citation

  • Chan, Kai-Ying & Oerlemans, Leon A.G. & Volschenk, Jako, 2015. "On the construct validity of measures of willingness to pay for green electricity: Evidence from a South African case," Applied Energy, Elsevier, vol. 160(C), pages 321-328.
    • Handle: RePEc:eee:appene:v:160:y:2015:i:c:p:321-328
    DOI: 10.1016/j.apenergy.2015.09.068
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