Advanced Search
MyIDEAS: Login

Information effects on consumer willingness to pay for electricity and water service attributes

Contents:

Author Info

  • Elcin Akcura

    ()
    (EBRD)

Abstract

Consumers constantly make decisions about the goods and services they purchase, and in most cases they do this with incomplete information. Many products that are available in stores, in catalogues, or over the internet are not accompanied by a full list of attributes or technical specifications. Such a lack of information is most apparent in non-market goods, such as with regard to utility service attributes. This paper examines information effects on consumers’ willingness to pay (WTP) for a number of electricity and water attributes, using two contingent valuation surveys administered in the United Kingdom. The attributes considered include WTP for a carbon cleaner electricity fuel mixture, and increasing security of supply. The results indicate that the quantity and complexity of information can potentially lead to individuals ignoring the information presented. The relevance of the attribute to the respondent is found to be a significant motivator in the processing of the information presented. The survey data also reveal a number of socio-economic, attitudinal and behavioural factors that affect WTP for the attributes considered.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.ebrd.com/downloads/research/economics/workingpapers/wp0160.pdf
Download Restriction: no

Bibliographic Info

Paper provided by European Bank for Reconstruction and Development, Office of the Chief Economist in its series Working Papers with number 160.

as in new window
Length: 37 pages
Date of creation: Oct 2013
Date of revision:
Publication status: Published in Working papers 160, European Bank for Reconstruction and Development
Handle: RePEc:ebd:wpaper:160

Contact details of provider:
Postal: One Exchange Square, London EC2A 2JN
Web page: http://www.ebrd.com/pages/research/publications/workingpapers.shtml
More information through EDIRC

Related research

Keywords: Contingent Valuation Method; Blackouts; Information Effect; Willingness to Pay; Zero Inflated Ordered Probit Model;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Abdullah, Sabah & Mariel, Petr, 2010. "Choice experiment study on the willingness to pay to improve electricity services," Energy Policy, Elsevier, vol. 38(8), pages 4570-4581, August.
  2. Batley, S. L. & Colbourne, D. & Fleming, P. D. & Urwin, P., 2001. "Citizen versus consumer: challenges in the UK green power market," Energy Policy, Elsevier, vol. 29(6), pages 479-487, May.
  3. Harris, Mark N. & Zhao, Xueyan, 2007. "A zero-inflated ordered probit model, with an application to modelling tobacco consumption," Journal of Econometrics, Elsevier, vol. 141(2), pages 1073-1099, December.
  4. Vuong, Quang H, 1989. "Likelihood Ratio Tests for Model Selection and Non-nested Hypotheses," Econometrica, Econometric Society, vol. 57(2), pages 307-33, March.
  5. Zarnikau, Jay, 2003. "Consumer demand for `green power' and energy efficiency," Energy Policy, Elsevier, vol. 31(15), pages 1661-1672, December.
  6. Ajzen, Icek & Brown, Thomas C. & Rosenthal, Lori H., 1996. "Information Bias in Contingent Valuation: Effects of Personal Relevance, Quality of Information, and Motivational Orientation," Journal of Environmental Economics and Management, Elsevier, vol. 30(1), pages 43-57, January.
  7. Gerald Häubl & Valerie Trifts, 2000. "Consumer Decision Making in Online Shopping Environments: The Effects of Interactive Decision Aids," Marketing Science, INFORMS, vol. 19(1), pages 4-21, May.
  8. Carlsson, Fredrik & Martinsson, Peter, 2004. "Willingness to Pay among Swedish Households to Avoid Power Outages - A Random Parameter Tobit Model Approach," Working Papers in Economics 154, University of Gothenburg, Department of Economics.
  9. David Hensher & Nina Shore & Kenneth Train, 2005. "Households’ Willingness to Pay for Water Service Attributes," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 32(4), pages 509-531, December.
  10. Simonson, Itamar & Kivetz, Ran, 2000. "The Effects of Incomplete Information on Consumer Choice," Research Papers 1609, Stanford University, Graduate School of Business.
  11. Nick Hanley & Alistair Munro, 1992. "The Effects of Information in Contingent Markets for Environmental Goods: A Survey and Some New Evidence," Working Papers 848, Queen's University, Department of Economics.
  12. Wiser, Ryan H., 2007. "Using contingent valuation to explore willingness to pay for renewable energy: A comparison of collective and voluntary payment vehicles," Ecological Economics, Elsevier, vol. 62(3-4), pages 419-432, May.
  13. Blomquist, Glenn C. & Whitehead, John C., 1998. "Resource quality information and validity of willingness to pay in contingent valuation," Resource and Energy Economics, Elsevier, vol. 20(2), pages 179-196, June.
  14. Karl C. Samples & John A. Dixon & KMarcia M. Gowen, 1986. "Information Disclosure and Endangered Species Valuation," Land Economics, University of Wisconsin Press, vol. 62(3), pages 306-312.
  15. Mark Yuying An & Roberto Ayala, 1996. "A Mixture Model of Willingness to Pay Distributions," Econometrics 9611002, EconWPA.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ebd:wpaper:160. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Olga Lucas).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.