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Valuing energy-saving measures in residential buildings: A choice experiment study

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  • Kwak, So-Yoon
  • Yoo, Seung-Hoon
  • Kwak, Seung-Jun
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    Abstract

    Air-conditioning and heating energy-saving measures can cut back the usage of energy. This paper attempts to apply a choice experiment in evaluating the consumer's willingness to pay (WTP) for air-conditioning and heating energy-saving measures in Korea's residential buildings. We consider the trade-offs between price and three attributes of energy-saving (window, facade, and ventilation) for selecting a preferred alternative and derive the marginal WTP (MWTP) estimate for each attribute. We also try to test irrelevant alternatives property for the estimation model holds and compare the estimation results of the multinomial logit (MNL) and the nested logit (NL) models. The NL model outperforms the MNL model. The NL model show that MWTPs for increasing the number of glasses and their variety, for increasing the thickness of facade for 1Â mm, and for establishing a ventilation system are KRW 17,392 (USD 18.2), 1,112 (1.2), and 11,827 (12.4), respectively. Overall, the potential consumers have significant amount of WTP.

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    Bibliographic Info

    Article provided by Elsevier in its journal Energy Policy.

    Volume (Year): 38 (2010)
    Issue (Month): 1 (January)
    Pages: 673-677

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    Handle: RePEc:eee:enepol:v:38:y:2010:i:1:p:673-677

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    Web page: http://www.elsevier.com/locate/enpol

    Related research

    Keywords: Energy-saving measures Choice experiment Nested logit model;

    References

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    1. Arik Levinson, 2001. "Energy Use By Apartment Tenants When Landlords Pay For Utilities," Working Papers gueconwpa~01-01-09, Georgetown University, Department of Economics.
    2. Danny Campbell & George Hutchinson & Riccardo Scarpa, 2006. "Lexicographic preferences for rural environmental landscape improvements: implications on individual-specific willingness to pay estimates," Working Papers 0610, Rural Economy and Development Programme,Teagasc.
    3. Silvia Banfi & Mehdi Farsi & Massimo Filippini & Martin Jakob, 2005. "Willingness to Pay for Energy-Saving Measures in Residential Buildings," CEPE Working paper series 05-41, CEPE Center for Energy Policy and Economics, ETH Zurich.
    4. Meyerhoff, Jurgen & Liebe, Ulf, 2006. "Protest beliefs in contingent valuation: Explaining their motivation," Ecological Economics, Elsevier, vol. 57(4), pages 583-594, June.
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    Citations

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    Cited by:
    1. Alberto Gago & Michael Hanemann & Xavier Labandeira & Ana Ramos, 2012. "Climate Change, Buildings and Energy Prices," Working Papers fa04-2012, Economics for Energy.
    2. Achtnicht, Martin, 2011. "Do environmental benefits matter? Evidence from a choice experiment among house owners in Germany," Ecological Economics, Elsevier, vol. 70(11), pages 2191-2200, September.
    3. Xiaoxia Zou & Yu-e Li & Qingzhu Gao & Yunfan Wan, 2012. "How water saving irrigation contributes to climate change resilience—a case study of practices in China," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 17(2), pages 111-132, February.
    4. Daziano, Ricardo A. & Achtnicht, Martin, 2013. "Accounting for uncertainty in willingness to pay for environmental benefits," ZEW Discussion Papers 13-059, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    5. 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.
    6. Achtnicht, Martin & Madlener, Reinhard, 2012. "Factors Influencing German House Owners' Preferences on Energy Retrofits," FCN Working Papers 4/2012, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    7. Zhang, Yixiang & Wang, Zhaohua & Zhou, Guanghui, 2013. "Antecedents of employee electricity saving behavior in organizations: An empirical study based on norm activation model," Energy Policy, Elsevier, vol. 62(C), pages 1120-1127.
    8. Hong, Taehoon & Koo, Choongwan & Kim, Hyunjoong & Seon Park, Hyo, 2014. "Decision support model for establishing the optimal energy retrofit strategy for existing multi-family housing complexes," Energy Policy, Elsevier, vol. 66(C), pages 157-169.

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