Elicting public support for greening the electricity mix using random parameter techniques
AbstractWith its commitment to double the share of renewables in electricity generation to at least 30% by 2020, the German government has embarked on a costly policy course whose public support remains an open empirical question. Building on ample household survey data, we trace peoples' willingness-to-pay (WTP) for various fuel mixes in electricity generation, and capture preference heterogeneity among respondents using random parameter techniques. Based on our estimates, we infer price premia that can be charged for specific electricity mixes while ensuring that a majority of people still supports the policy. Despite that people's WTP for electricity is positively correlated with the share of renewables in electricity generation, our results imply that the financial scope for subsidizing renewables is virtually exhausted. --
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 Christian-Albrechts-University of Kiel, Department of Economics in its series Economics Working Papers with number 2010,02.
Date of creation: 2010
Date of revision:
green electricity; willingness-to-pay; preference heterogeneity; policy evaluation;
Other versions of this item:
- Grösche, Peter & Schröder, Carsten, 2011. "Eliciting public support for greening the electricity mix using random parameter techniques," Energy Economics, Elsevier, vol. 33(2), pages 363-370, March.
- Peter Grösche & Carsten Schröder, 2010. "Eliciting Public Support for Greening the Electricity Mix Using Random Parameter Techniques," Ruhr Economic Papers 0233, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-03-06 (All new papers)
- NEP-ENE-2010-03-06 (Energy Economics)
- NEP-ENV-2010-03-06 (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.:
- Wiser, Ryan H., 2007. "Using contingent valuation to explore willingness to pay for renewable energy: A comparison of collective and voluntary payment vehicles," Ecological Economics, Elsevier, vol. 62(3-4), pages 419-432, May.
- Fuchs-Schundeln, Nicola & Alesina, Alberto, 2007. "Good-Bye Lenin (Or Not?): The Effect of Communism on People's Preferences," Scholarly Articles 4553032, Harvard University Department of Economics.
- Anna Alberini & Valentina Zanatta & Paolo Rosato, 2005.
"Combining Actual and Contingent Behavior to Estimate the Value of Sports Fishing in the Lagoon of Venice,"
2005.44, Fondazione Eni Enrico Mattei.
- Alberini, Anna & Zanatta, Valentina & Rosato, Paolo, 2007. "Combining actual and contingent behavior to estimate the value of sports fishing in the Lagoon of Venice," Ecological Economics, Elsevier, vol. 61(2-3), pages 530-541, March.
- Patricia Champ & Richard Bishop, 2001. "Donation Payment Mechanisms and Contingent Valuation: An Empirical Study of Hypothetical Bias," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 19(4), pages 383-402, August.
- Scarpa, Riccardo & Willis, Ken, 2010. "Willingness-to-pay for renewable energy: Primary and discretionary choice of British households' for micro-generation technologies," Energy Economics, Elsevier, vol. 32(1), pages 129-136, January.
- Sendhil Mullainathan & Marianne Bertrand, 2001. "Do People Mean What They Say? Implications for Subjective Survey Data," American Economic Review, American Economic Association, vol. 91(2), pages 67-72, May.
- Merz, Joachim, 1994.
"Microdata Adjustment by the Minimum Information Loss Principle,"
7231, University Library of Munich, Germany.
- Joachim Merz, 1994. "Microdata Adjustment by the Minimum Information Loss Principle," FFB-Discussionpaper 10, Research Institute on Professions (Forschungsinstitut Freie Berufe (FFB)), LEUPHANA University Lüneburg.
- Gregory Poe & Jeremy Clark & Daniel Rondeau & William Schulze, 2002. "Provision Point Mechanisms and Field Validity Tests of Contingent Valuation," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 23(1), pages 105-131, September.
- Peter A. Diamond & Jerry A. Hausman, 1994. "Contingent Valuation: Is Some Number Better than No Number?," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 45-64, Fall.
- Bergmann, Ariel & Hanley, Nick & Wright, Robert, 2006. "Valuing the attributes of renewable energy investments," Energy Policy, Elsevier, vol. 34(9), pages 1004-1014, June.
- Zarnikau, Jay, 2003. "Consumer demand for `green power' and energy efficiency," Energy Policy, Elsevier, vol. 31(15), pages 1661-1672, December.
- I J Bateman & I H Langford, 1997. "Budget-constraint, temporal, and question-ordering effects in contingent valuation studies," Environment and Planning A, Pion Ltd, London, vol. 29(7), pages 1215-1228, July.
- Roland Menges & Carsten Schroeder & Stefan Traub, 2005. "Altruism, Warm Glow and the Willingness-to-Donate for Green Electricity: An Artefactual Field Experiment," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 31(4), pages 431-458, 08.
- Harrison, Glenn W. & Rutström, E. Elisabet, 2008. "Experimental Evidence on the Existence of Hypothetical Bias in Value Elicitation Methods," Handbook of Experimental Economics Results, Elsevier.
- John List, 2001.
"Do explicit warnings eliminate the hypothetical bias in elicitation procedures? Evidence from field auctions for sportscards,"
Framed Field Experiments
00163, The Field Experiments Website.
- John A. List, 2001. "Do Explicit Warnings Eliminate the Hypothetical Bias in Elicitation Procedures? Evidence from Field Auctions for Sportscards," American Economic Review, American Economic Association, vol. 91(5), pages 1498-1507, December.
- John Loomis & Thomas Brown & Beatrice Lucero & George Peterson, 1997. "Evaluating the Validity of the Dichotomous Choice Question Format in Contingent Valuation," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 10(2), pages 109-123, September.
- Diamond, Peter, 1996.
"Testing the Internal Consistency of Contingent Valuation Surveys,"
Journal of Environmental Economics and Management,
Elsevier, vol. 30(3), pages 337-347, May.
- Diamond, P., 1993. "Testing the Internal Consistency of Contingent Valuation Surveys," Working papers 93-1, Massachusetts Institute of Technology (MIT), Department of Economics.
- Ajzen, Icek & Brown, Thomas C. & Rosenthal, Lori H., 1996. "Information Bias in Contingent Valuation: Effects of Personal Relevance, Quality of Information, and Motivational Orientation," Journal of Environmental Economics and Management, Elsevier, vol. 30(1), pages 43-57, January.
- Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132.
- Jeremy Clark & Lana Friesen, 2006.
"The Causes of Order Effects in Contingent Valuation Surveys: An Experimental Investigation,"
Working Papers in Economics
06/06, University of Canterbury, Department of Economics and Finance.
- Clark, Jeremy & Friesen, Lana, 2008. "The causes of order effects in contingent valuation surveys: An experimental investigation," Journal of Environmental Economics and Management, Elsevier, vol. 56(2), pages 195-206, September.
- Carlo Andrea Bollino, 2009. "The Willingness to Pay for Renewable Energy Sources: The Case of Italy with Socio-demographic Determinants," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 81-96.
- Menegaki, Angeliki, 2008. "Valuation for renewable energy: A comparative review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 12(9), pages 2422-2437, December.
- Richard T. Carson & Nicholas E. Flores & Kerry M. Martin & Jennifer L. Wright, 1996.
"Contingent Valuation and Revealed Preference Methodologies: Comparing the Estimates for Quasi-Public Goods,"
University of Wisconsin Press, vol. 72(1), pages 80-99.
- Carson, Richard T. & Flores, Nicholas E. & Martin, Kerry M. & Wright, Jennifer L., 1995. "Contingent Valuation and Revealed Preference Methodologies: Comparing the Estimates for Quasi-Public Goods," 1995 Conference (39th), February 14-16, 1995, Perth, Australia 148793, Australian Agricultural and Resource Economics Society.
- Halstead, John M. & Luloff, A.E. & Stevens, Thomas H., 1992. "Protest Bidders In Contingent Valuation," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 21(2), October.
- Roe, Brian & Teisl, Mario F. & Levy, Alan & Russell, Matthew, 2001. "US consumers' willingness to pay for green electricity," Energy Policy, Elsevier, vol. 29(11), pages 917-925, September.
- Laura O. Taylor & Ronald G. Cummings, 1999. "Unbiased Value Estimates for Environmental Goods: A Cheap Talk Design for the Contingent Valuation Method," American Economic Review, American Economic Association, vol. 89(3), pages 649-665, June.
- James Murphy & P. Allen & Thomas Stevens & Darryl Weatherhead, 2005. "A Meta-analysis of Hypothetical Bias in Stated Preference Valuation," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 30(3), pages 313-325, 03.
- Smith, V. Kerry & Osborne, Laura L., 1996. "Do Contingent Valuation Estimates Pass a "Scope" Test? A Meta-analysis," Journal of Environmental Economics and Management, Elsevier, vol. 31(3), pages 287-301, November.
- Andrew A. Goett & Kathleen Hudson & Kenneth E. Train, 2000. "Customers' Choice Among Retail Energy Suppliers: The Willingness-to-Pay for Service Attributes," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 1-28.
- Helen R. Neill & Ronald G. Cummings & Philip T. Ganderton & Glenn W. Harrison & Thomas McGuckin, 1994. "Hypothetical Surveys and Real Economic Commitments," Land Economics, University of Wisconsin Press, vol. 70(2), pages 145-154.
- W. Michael Hanemann, 1994. "Valuing the Environment through Contingent Valuation," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 19-43, Fall.
- Batley, S. L. & Colbourne, D. & Fleming, P. D. & Urwin, P., 2001. "Citizen versus consumer: challenges in the UK green power market," Energy Policy, Elsevier, vol. 29(6), pages 479-487, May.
- Boyle Kevin J. & Welsh Michael P. & Bishop Richard C., 1993. "The Role of Question Order and Respondent Experience in Contingent-Valuation Studies," Journal of Environmental Economics and Management, Elsevier, vol. 25(1), pages S80-S99, July.
- Manuel Frondel & Nolan Ritter & Christoph M. Schmidt, 2011. "Die Kosten des Klimaschutzes am Beispiel der Strompreise," RWI Positionen, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, pages 24, 04.
- Hübner, Malte & Schmidt, Christoph M. & Weigert, Benjamin, 2012.
"Energiepolitik: Erfolgreiche Energiewende nur im europäischen Kontext,"
03/2012, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung.
- Malte Hübner & Christoph M. Schmidt & Benjamin Weigert, 2012. "Energiepolitik: Erfolgreiche Energiewende nur im europäischen Kontext," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 13(4), pages 286-307, November.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics).
If references are entirely missing, you can add them using this form.