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An Experimental Study on the Gap between Willingness to Pay and Willingness to Donate for Green Electricity

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Author Info

  • Roland Menges
  • Stefan Traub

Abstract

We experimentally investigate the gap between willingness to pay and willingness to donate in the context of the promotion of green electricity. The experiment involves two differing scenarios (public choice versus individual choice) and two distinct public payment vehicles (direct tax versus indirect tax). Our main result is that subjects´ WTP significantly exceeds WTD, by a factor of three. Regression analysis shows that our results remain robust when controlling for personal characteristics and attitudes. We conclude from our results that our subjects perceived the promotion of environmental quality as a public duty rather than an individual task.

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Bibliographic Info

Article provided by Mohr Siebeck, Tübingen in its journal FinanzArchiv.

Volume (Year): 65 (2009)
Issue (Month): 3 (September)
Pages: 335-357

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Handle: RePEc:mhr:finarc:urn:sici:0015-2218(200909)65:3_335:aesotg_2.0.tx_2-d

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Web page: http://www.mohr.de/fa

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Postal: Mohr Siebeck GmbH & Co. KG, P.O.Box 2040, 72010 Tübingen, Germany
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Related research

Keywords: free-riding; green electricity; impure altruism; willingness to donate; willingness to pay;

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Cited by:
  1. Löschel, Andreas & Sturm, Bodo & Uehleke, Reinhard, 2013. "Revealed preferences for climate protection when the purely individual perspective is relaxed: Evidence from a framed field experiment," ZEW Discussion Papers 13-006, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  2. Czap, Natalia V. & Czap, Hans J. & Khachaturyan, Marianna & Lynne, Gary D. & Burbach, Mark, 2012. "Walking in the shoes of others: Experimental testing of dual-interest and empathy in environmental choice," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(5), pages 642-653.

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