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Are Consumers Willing to Pay More for Electricity from Cooperatives? Results from an Online Choice Experiment in Germany

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  • Sagebiel, Julian
  • Müller, Jakob R.
  • Rommel, Jens

Abstract

With 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 Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 52385.

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Date of creation: 2013
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Handle: RePEc:pra:mprapa:52385

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Keywords: Choice Experiments; Cooperatives; Energy Transition;

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Cited by:
  1. Yildiz, Özgür & Rommel, Jens & Debor, Sarah & Holstenkamp, Lars & Mey, Franziska & Müller, Jakob R. & Radtke, Jörg & Rognli, Judith, 2014. "Research Perspectives on Renewable Energy Cooperatives in Germany: Empirical Insights and Theoretical Lenses," MPRA Paper 55931, University Library of Munich, Germany.

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