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Consumers’ willingness to pay for electricity after the Great East Japan Earthquake

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  • Morita, Tamaki
  • Managi, Shunsuke

Abstract

The Great East Japan Earthquake of March 11, 2011 severely damaged the Fukushima Daiichi nuclear power plants, and reminded people of the potential risk of an electricity supply shortage. Consumers have started to pay attention to the source of electricity production since then. This study presents the results of both discrete choice experiments and choice probability experiments to determine citizens’ willingness to pay (WTP) for residential electricity produced by solar, wind, and nuclear power, and by natural gas to evaluate the three energy-mix scenarios presented by the government of Japan. In addition, we measure the effects of positive or negative information about nuclear energy. The results indicate that on average, Japanese consumers have a negative WTP for electricity produced by nuclear power regardless of the information they read, and that their WTP for energy-mix change is far less than the price increase already planned by electrical companies, which do not have any prospects for an actual change in their energy mix.

Suggested Citation

  • Morita, Tamaki & Managi, Shunsuke, 2015. "Consumers’ willingness to pay for electricity after the Great East Japan Earthquake," Economic Analysis and Policy, Elsevier, vol. 48(C), pages 82-105.
    • Handle: RePEc:eee:ecanpo:v:48:y:2015:i:c:p:82-105
    DOI: 10.1016/j.eap.2015.09.004
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    References listed on IDEAS

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    2. Gizem Koşar & Cormac O'Dea, 2022. "Expectations Data in Structural Microeconomic Models," NBER Working Papers 30094, National Bureau of Economic Research, Inc.
    3. Shin Kinoshita, 2020. "Conjoint analysis of Japanese households’ energy-saving behavior after the earthquake: The role of the preferences for renewable energy," Energy & Environment, , vol. 31(4), pages 676-691, June.
    4. Managi, Shunsuke & Guan, Dabo, 2017. "Multiple disasters management: Lessons from the Fukushima triple events," Economic Analysis and Policy, Elsevier, vol. 53(C), pages 114-122.
    5. Miwa Nakai & Victor von Loessl & Heike Wetzel, 2022. "Preferences for dynamic electricity tariffs: A comparison of households in Germany and Japan," MAGKS Papers on Economics 202213, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    6. Romuald Méango & François Poinas, 2023. "The (Option-) Value of Overstaying," CESifo Working Paper Series 10536, CESifo.
    7. Gutsche, Gunnar & Nakai, Miwa & Arimura, Toshi H., 2021. "Revisiting the determinants of individual sustainable investment—The case of Japan," Journal of Behavioral and Experimental Finance, Elsevier, vol. 30(C).
    8. Romauld Méango, 2023. "Identification of ex ante returns using elicited choice probabilities," Economics Series Working Papers 1007, University of Oxford, Department of Economics.
    9. Koşar, Gizem & Ransom, Tyler & van der Klaauw, Wilbert, 2022. "Understanding migration aversion using elicited counterfactual choice probabilities," Journal of Econometrics, Elsevier, vol. 231(1), pages 123-147.
    10. Collewet, Marion & Koster, Paul, 2023. "Preference estimation from point allocation experiments," Journal of choice modelling, Elsevier, vol. 48(C).
    11. Dalia Streimikiene & Tomas Balezentis & Ilona Alisauskaite-Seskiene & Gintare Stankuniene & Zaneta Simanaviciene, 2019. "A Review of Willingness to Pay Studies for Climate Change Mitigation in the Energy Sector," Energies, MDPI, vol. 12(8), pages 1-38, April.
    12. Makiko Nakano, 2023. "Examining Preference for Energy-Related Information through a Choice Experiment," Energies, MDPI, vol. 16(5), pages 1-15, March.
    13. Gunnar Gutsche & Miwa Nakai & Toshi H. Arimura, 2021. "Individual Sustainable Investment in Japan," RIEEM Discussion Paper Series 2006, Research Institute for Environmental Economics and Management, Waseda University.
    14. Collewet, Marion & Koster, Paul, 2023. "Preference estimation from point allocation experiments," Journal of choice modelling, Elsevier, vol. 48(C).

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    More about this item

    Keywords

    Energy-mix; Consumer preferences; Choice probabilities; Conjoint analysis; Nuclear power; Renewable energy;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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