Willingness-to-Pay for Energy Conservation and Free-Ridership on Subsidization – Evidence from Germany
AbstractUnderstanding the determinants of home-efficiency improvements is significant to a range of energy policy issues, including the reduction of fossil fuel use and environmental protection.This paper analyzes retrofit choices by assembling a unique data set merging a nationwide household survey from Germany with regional data on wages and construction costs. To explore the influence of both heterogeneous preferences and correlation among the utility of alternatives, conditional-, random parameters-, and error components logit models are estimated that parameterize the influence of costs, energy savings,and household-level socioeconomic attributes on the likelihood of undertaking one of 16 renovation options.We use the model coefficients to derive household-specific marginal willingness-to-pay estimates, and with these assess the extent to which free-ridership may undermine the effectiveness of recently implemented programs that subsidize the costs of retrofits.
Download InfoIf 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.
Bibliographic InfoPaper provided by Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen in its series Ruhr Economic Papers with number 0058.
Length: 31 pages
Date of creation: Aug 2008
Date of revision:
Other versions of this item:
- Peter Grosche & Colin Vance, 2009. "Willingness to Pay for Energy Conservation and Free-Ridership on Subsidization: Evidence from Germany," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 135-154.
- 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
- Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
This paper has been announced in the following NEP Reports:
- NEP-AGR-2008-11-04 (Agricultural Economics)
- NEP-ALL-2008-11-04 (All new papers)
- NEP-DCM-2008-11-04 (Discrete Choice Models)
- NEP-ENE-2008-11-04 (Energy Economics)
- NEP-ENV-2008-11-04 (Environmental Economics)
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.:
- Yannis M. Ioannides, 1999.
"Residential Neighborhood Effects,"
Discussion Papers Series, Department of Economics, Tufts University
9912, Department of Economics, Tufts University.
- Gilbert E. Metcalf & Kevin A. Hassett, 1999.
"Measuring The Energy Savings From Home Improvement Investments: Evidence From Monthly Billing Data,"
The Review of Economics and Statistics,
MIT Press, vol. 81(3), pages 516-528, August.
- Kevin A. Hassett & Gilbert E. Metcalf, 1997. "Measuring the Energy Savings from Home Improvements Investments: Evidence from Monthly Billing Data," Discussion Papers Series, Department of Economics, Tufts University 9701, Department of Economics, Tufts University.
- Gilbert E. Metcalf & Kevin A. Hassett, 1997. "Measuring the Energy Savings from Home Improvement Investments: Evidence from Monthly Billing Data," NBER Working Papers 6074, National Bureau of Economic Research, Inc.
- Brownstone, David & Train, Kenneth, 1999.
"Forecasting new product penetration with flexible substitution patterns,"
University of California Transportation Center, Working Papers
qt3tb6j874, University of California Transportation Center.
- Brownstone, David & Train, Kenneth, 1998. "Forecasting new product penetration with flexible substitution patterns," Journal of Econometrics, Elsevier, vol. 89(1-2), pages 109-129, November.
- Brownstone, David & Train, Kenneth, 1999. "Forecasting new product penetration with flexible substitution patterns," University of California Transportation Center, Working Papers qt1j6814b3, University of California Transportation Center.
- Banfi, Silvia & Farsi, Mehdi & Filippini, Massimo & Jakob, Martin, 2008.
"Willingness to pay for energy-saving measures in residential buildings,"
Elsevier, vol. 30(2), pages 503-516, March.
- Silvia Banfi & Mehdi Farsi & Massimo Filippini & Martin Jakob, 2005. "Willingness to Pay for Energy-Saving Measures in Residential Buildings," CEPE Working paper series 05-41, CEPE Center for Energy Policy and Economics, ETH Zurich.
- 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.
- Joskow, P.L. & Marron, D.B., 1991. "What does a Negawatt Really Cost?," Working papers 596, Massachusetts Institute of Technology (MIT), Department of Economics.
- David A. Hensher & Stewart Jones & William H. Greene, 2007. "An Error Component Logit Analysis of Corporate Bankruptcy and Insolvency Risk in Australia," The Economic Record, The Economic Society of Australia, vol. 83(260), pages 86-103, 03.
- Quigley, John M & Rubinfeld, Daniel L, 1989. "Unobservables in Consumer Choice: Residential Energy and the Demand for Comfort," The Review of Economics and Statistics, MIT Press, vol. 71(3), pages 416-25, August.
- Achtnicht, Martin & Madlener, Reinhard, 2012.
"Factors influencing German house owners' preferences on energy retrofits,"
ZEW Discussion Papers
12-042, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Achtnicht, Martin & Madlener, Reinhard, 2012. "Factors Influencing German House Owners' Preferences on Energy Retrofits," FCN Working Papers 4/2012, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
- Peter Grösche & Christop M. Schmidt & Colin Vance, 2013. "Identifying Free-riding in Home Renovation Programs Using Revealed Preference Data," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 233(5-6), pages 600-618, October.
- Xavier Labandeira Villot & Pedro Linares, 2009.
"Energy Efficiency: Economics and Policy,"
- Marie-Laure Nauleau, 2013. "Heavy subsidization reduces free-ridership : Evidence from an econometric study of the French dwelling insulation tax credit," CIRED Working Papers hal-00866445, HAL.
- Marie-Laure Nauleau, 2013. "Heavy subsidization reduces free-ridership : Evidence from an econometric study of the French dwelling insulation tax credit," Working Papers hal-00866445, HAL.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sabine Weiler).
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.