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Measuring the indirect costs associated with the establishment of a wind farm: An application of the Contingent Valuation Method

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  • M. du Preez
  • G. Menzies
  • M.C. Sale
  • S.G. Hosking
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    Abstract

    Although a green energy source, the location of electrical generating windmills may cause a disamenity effect (negative externality). The establishment of a wind farm is known as a locally undesirable land use (LULU) and leads to the not-in-my-backyard syndrome (NIMBY). In an application of the contingent valuation method, a willingness-to-accept framework was used to estimate the aggregate annual compensation required to allow the construction of a wind farm near Jeffrey’s Bay, South Africa. This compensation amounted to R490 695. A binary choice logit analysis found that retirement status, concern about climate change, concern about view-shed impacts and the offer amount are important predictors of voting for or against the project.

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    Bibliographic Info

    Paper provided by Economic Research Southern Africa in its series Working Papers with number 258.

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    Length: 10 pages
    Date of creation: 2011
    Date of revision:
    Handle: RePEc:rza:wpaper:258

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    Keywords: Contingent Valuation Method; indirect cost; wind farm;

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    1. Charles Warren & Carolyn Lumsden & Simone O'Dowd & Richard Birnie, 2005. "'Green On Green': Public perceptions of wind power in Scotland and Ireland," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 48(6), pages 853-875.
    2. Alexandros Dimitropoulos & Andreas Kontoleon, 2008. "Assessing the Determinants of Local Acceptability of Wind Farm Investment: A Choice Experiment in the Greek Aegean Islands," Environmental Economy and Policy Research Working Papers 35.2008, University of Cambridge, Department of Land Economics, revised 2008.
    3. Peter A. Groothuis & Jana D. Groothuis & John C. Whitehead, 2007. "Green vs. Green: Measuring the Compensation Required to Site Electrical Generation Windmills in a Viewshed," Working Papers 07-12, Department of Economics, Appalachian State University.
    4. Cameron, Trudy Ann, 1988. "A new paradigm for valuing non-market goods using referendum data: Maximum likelihood estimation by censored logistic regression," Journal of Environmental Economics and Management, Elsevier, vol. 15(3), pages 355-379, September.
    5. Yue, Cheng-Dar & Liu, Chung-Ming & Liou, Eric M. L., 2001. "A transition toward a sustainable energy future: feasibility assessment and development strategies of wind power in Taiwan," Energy Policy, Elsevier, vol. 29(12), pages 951-963, October.
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