Does it matter when a power outage occurs? -- A choice experiment study on the willingness to pay to avoid power outages
AbstractUsing a choice experiment survey, the marginal willingness to pay (WTP) among Swedish households for reductions in power outages is estimated. The results from the random parameter logit estimation indicate that the marginal WTP increases with the duration of the outages, and is higher if the outages occur during weekends and during winter months. Moreover, the random parameter logit model allows us to estimate a sample distribution of WTP and we find a significant unobserved heterogeneity in some of the outage attributes. Given that households have negative welfare effects from outages, it is important that policy makers consider these negative impacts on household utility when regulating the Swedish electricity market.
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Bibliographic InfoArticle provided by Elsevier in its journal Energy Economics.
Volume (Year): 30 (2008)
Issue (Month): 3 (May)
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Web page: http://www.elsevier.com/locate/eneco
Other versions of this item:
- Carlsson, Fredrik & Martinsson, Peter, 2004. "Does it Matter When a Power Outage Occurs? - A Choice Experiment Study on the Willingness to Pay to Avoid Power Outages," Working Papers in Economics 155, University of Gothenburg, Department of Economics.
- C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
- C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply
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