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Elicting public support for greening the electricity mix using random parameter techniques

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  • Grösche, Peter
  • Schröder, Carsten

Abstract

With 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. --

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Paper provided by Christian-Albrechts-University of Kiel, Department of Economics in its series Economics Working Papers with number 2010,02.

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Date of creation: 2010
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Handle: RePEc:zbw:cauewp:201002

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Keywords: green electricity; willingness-to-pay; preference heterogeneity; policy evaluation;

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Citations

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Cited by:
  1. Malte Hübner & Christoph M. Schmidt & Benjamin Weigert, 2012. "Energiepolitik: Erfolgreiche Energiewende nur im europäischen Kontext," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, Verein für Socialpolitik, vol. 13(4), pages 286-307, November.
  2. Simona Bigerna & Carlo Andrea Bollino & Paolo Polinori, 2014. "The Question of Sustainability of Green Electricity Policy Intervention," Sustainability, MDPI, Open Access Journal, vol. 6(8), pages 5378-5400, August.
  3. Mark A. Andor & Manuel Frondel & Colin Vance, 2014. "Diskussionspapier: Zahlungsbereitschaft für grünen Strom – Die Kluft zwischen Wunsch und Wirklichkeit," RWI Materialien, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, pages 27, 05.
  4. Manuel Frondel & Nolan Ritter & Christoph M. Schmidt, 2011. "Die Kosten des Klimaschutzes am Beispiel der Strompreise," RWI Positionen, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, pages 24, 04.
  5. Manuel Frondel & Christoph M. Schmidt & Colin Vance, 2012. "Germany’s Solar Cell Promotion: An Unfolding Disaster," Ruhr Economic Papers, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen 0353, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  6. Mark Andor & Manuel Frondel & Colin Vance, 2014. "Mitigating Hypothetical Bias – Evidence on the Effects of Correctives from a Large Field Study," Ruhr Economic Papers, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen 0480, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  7. Swantje Sundt & Katrin Rehdanz, 2014. "Consumer’s Willingness to Pay for Green Electricity: A Meta-Analysis of the Literature," Kiel Working Papers 1931, Kiel Institute for the World Economy.
  8. Bigerna, Simona & Polinori, Paolo, 2014. "Italian households׳ willingness to pay for green electricity," Renewable and Sustainable Energy Reviews, Elsevier, Elsevier, vol. 34(C), pages 110-121.

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