Are Consumers Willing to Pay More for Electricity from Cooperatives? Results from an Online Choice Experiment in Germany
AbstractWith liberalization in 1998, numerous firms have entered the German retail electricity market, including newly formed cooperatives. Based on Transaction Cost Economics, we develop a theoretical framework seeking to explain preferences for electricity supplied by cooperatives from a consumer perspective. Drawing on a convenience sample of 287 German electricity consumers and Choice Experiment data from an online survey, we estimate Willingness-to-Pay values for organizational attributes of electricity suppliers, while accounting for observed and unobserved heterogeneity. Consumers in the sample exhibit a large Willingness-to-Pay for renewable energy. Our results also indicate a substantial Willingness-to-Pay for transparent pricing, participation in decision making, and local suppliers. Democratic decision making – a distinct feature of cooperatives – exhibits positive Willingness-to-Pay values for approximately one fifth of the sample. Taken together, our findings suggest a slightly higher Willingness-to-Pay for electricity produced by cooperatives. Limitations of applied sampling and other important aspects of energy transition are also discussed.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 52385.
Date of creation: 2013
Date of revision:
Choice Experiments; Cooperatives; Energy Transition;
Find related papers by JEL classification:
- C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-12-29 (All new papers)
- NEP-DCM-2013-12-29 (Discrete Choice Models)
- NEP-ENE-2013-12-29 (Energy Economics)
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