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Inner Conflict between Nuclear Power Generation and Electricity Rates: A Japanese Case Study

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  • Takanori Ida
  • Kosuke Takemura
  • Masayuki Sato
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    Abstract

    Since the March 11 earthquake, Japanese households have been facing a trade-off problem between decreasing dependency on nuclear power generation and avoiding an increase in electricity rates. We analyze this inner conflict quantitatively, adopting two economic-psychological approaches: First, we note that the trade-off causes cognitive dissonance after making a choice that results in a wider desirability gap between the chosen alternative and the rejected alternative. Second, the consumer surplus improves by 11.2% with a no-choice option for suspending judgment in the presence of cognitive dissonance. Third, individual characteristics such as gender and annual household income are significantly correlated with both cognitive dissonance and a preference for the no-choice option.

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    File URL: http://www.econ.kyoto-u.ac.jp/projectcenter/Paper/e-14-003.pdf
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    Bibliographic Info

    Paper provided by Graduate School of Economics Project Center, Kyoto University in its series Discussion papers with number e-14-003.

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    Length: 30 pages
    Date of creation: Apr 2014
    Date of revision:
    Handle: RePEc:kue:dpaper:e-14-003

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    1. Shane Frederick & George Loewenstein & Ted O'Donoghue, 2002. "Time Discounting and Time Preference: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 351-401, June.
    2. McConnell K. E., 1995. "Consumer Surplus from Discrete Choice Models," Journal of Environmental Economics and Management, Elsevier, vol. 29(3), pages 263-270, November.
    3. David Revelt & Kenneth Train, 1998. "Mixed Logit With Repeated Choices: Households' Choices Of Appliance Efficiency Level," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 647-657, November.
    4. Stoutenborough, James W. & Sturgess, Shelbi G. & Vedlitz, Arnold, 2013. "Knowledge, risk, and policy support: Public perceptions of nuclear power," Energy Policy, Elsevier, vol. 62(C), pages 176-184.
    5. Kato, Takaaki & Takahara, Shogo & Nishikawa, Masashi & Homma, Toshimitsu, 2013. "A case study of economic incentives and local citizens' attitudes toward hosting a nuclear power plant in Japan: Impacts of the Fukushima accident," Energy Policy, Elsevier, vol. 59(C), pages 808-818.
    6. Luce, Mary Frances, 1998. " Choosing to Avoid: Coping with Negatively Emotion-Laden Consumer Decisions," Journal of Consumer Research, University of Chicago Press, vol. 24(4), pages 409-33, March.
    7. Dhar, Ravi, 1997. " Consumer Preference for a No-Choice Option," Journal of Consumer Research, University of Chicago Press, vol. 24(2), pages 215-31, September.
    8. Siegrist, Michael & Sütterlin, Bernadette & Keller, Carmen, 2014. "Why have some people changed their attitudes toward nuclear power after the accident in Fukushima?," Energy Policy, Elsevier, vol. 69(C), pages 356-363.
    9. Bhat, Chandra R., 2001. "Quasi-random maximum simulated likelihood estimation of the mixed multinomial logit model," Transportation Research Part B: Methodological, Elsevier, vol. 35(7), pages 677-693, August.
    10. Jeff Brazell & Christopher Diener & Ekaterina Karniouchina & William Moore & Válerie Séverin & Pierre-Francois Uldry, 2006. "The no-choice option and dual response choice designs," Marketing Letters, Springer, vol. 17(4), pages 255-268, December.
    11. Hartmann, Patrick & Apaolaza, Vanessa & D'Souza, Clare & Echebarria, Carmen & Barrutia, Jose M., 2013. "Nuclear power threats, public opposition and green electricity adoption: Effects of threat belief appraisal and fear arousal," Energy Policy, Elsevier, vol. 62(C), pages 1366-1376.
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