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Households' willingness to pay for reliable electricity services in Ghana

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  • Taale, Francis
  • Kyeremeh, Christian

Abstract

Access to reliable electricity is important in increasing the living standards of households and promoting sustainable development. However, Ghanaian households have had to grapple with frequent power outages and poor quality electricity services in recent times. This study examines the factors influencing households’ willingness to pay for reliable electricity services in Ghana. Using data collected from 950 households in the Cape Coast Metropolitan Area and the tobit regression technique, it was revealed that monthly income, prior notice on power outages, business ownership, separate meter ownership, household size and education significantly affect willingness to pay for reliable electricity services. On the average, households were prepared to pay 44 percent (GH¢6.8) more, relative to the mean monthly electricity bill in the sample, to improve electricity services. It is envisaged that the findings would be used by policy makers and utility companies to make electricity generation and distribution more sustainable and efficient.

Suggested Citation

  • Taale, Francis & Kyeremeh, Christian, 2015. "Households' willingness to pay for reliable electricity services in Ghana," MPRA Paper 65780, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:65780
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    Cited by:

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    3. Wen, Cheng & Lovett, Jon C. & Kwayu, Emmanuel J. & Msigwa, Consalva, 2023. "Off-grid households’ preferences for electricity services: Policy implications for mini-grid deployment in rural Tanzania," Energy Policy, Elsevier, vol. 172(C).
    4. Paul Nduhuura & Matthias Garschagen & Abdellatif Zerga, 2021. "Impacts of Electricity Outages in Urban Households in Developing Countries: A Case of Accra, Ghana," Energies, MDPI, vol. 14(12), pages 1-26, June.
    5. Kim, Ju-Hee & Lim, Seul-Ye & Yoo, Seung-Hoon, 2021. "Public preferences for introducing a power-to-heat system in South Korea," Renewable and Sustainable Energy Reviews, Elsevier, vol. 151(C).
    6. Xie, Bai-Chen & Zhao, Wei, 2018. "Willingness to pay for green electricity in Tianjin, China: Based on the contingent valuation method," Energy Policy, Elsevier, vol. 114(C), pages 98-107.
    7. Han, Myat Su & Biying, Yu & Cudjoe, Dan & Yuan, Qianqian, 2020. "Investigating willingness-to-pay to support solar energy research and development in Myanmar," Energy Policy, Elsevier, vol. 146(C).
    8. Artem Korzhenevych & Charles Kofi Owusu, 2021. "Renewable Minigrid Electrification in Off-Grid Rural Ghana: Exploring Households Willingness to Pay," Sustainability, MDPI, vol. 13(21), pages 1-17, October.
    9. Deutschmann, Joshua W. & Postepska, Agnieszka & Sarr, Leopold, 2021. "Measuring willingness to pay for reliable electricity: Evidence from Senegal," World Development, Elsevier, vol. 138(C).
    10. Ayodele, T.R. & Ogunjuyigbe, A.S.O. & Ajayi, O.D. & Yusuff, A.A. & Mosetlhe, T.C., 2021. "Willingness to pay for green electricity derived from renewable energy sources in Nigeria," Renewable and Sustainable Energy Reviews, Elsevier, vol. 148(C).

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    More about this item

    Keywords

    reliable electricity services; households; separate meter; education; willingness to pay; Ghana;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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