IDEAS home Printed from https://ideas.repec.org/a/eee/eneeco/v33y2011i6p1095-1102.html
   My bibliography  Save this article

Consumer willingness to pay for appliances produced by Green Power Partners

Author

Listed:
  • Ward, David O.
  • Clark, Christopher D.
  • Jensen, Kimberly L.
  • Yen, Steven T.

Abstract

The U.S. Environmental Protection Agency's Green Power Partnership (GPP), has over 1200 members purchasing nearly 18billion kilowatt hours of green power annually. One possible motivation for firms to join the GPP is to raise their reputation for environmental quality among consumers. This research investigates the extent to which consumer preferences for a residential appliance are affected by information on whether or not the appliance manufacturer was a member of the GPP. Data for the study were obtained from a contingent choice exercise in an online survey of a national sample of adults. The results suggest that consumers are, on average, willing to pay an extra $48.52 to $70.95 for a refrigerator manufactured by a company that is a member of the GPP. These amounts appear to generally exceed the additional costs associated with using green power to manufacture a refrigerator and suggest that GPP could effectively be used to market consumer products.

Suggested Citation

  • Ward, David O. & Clark, Christopher D. & Jensen, Kimberly L. & Yen, Steven T., 2011. "Consumer willingness to pay for appliances produced by Green Power Partners," Energy Economics, Elsevier, vol. 33(6), pages 1095-1102.
    • Handle: RePEc:eee:eneeco:v:33:y:2011:i:6:p:1095-1102
    DOI: 10.1016/j.eneco.2011.02.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0140988311000399
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eneco.2011.02.003?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Ian H. Rowlands & Daniel Scott & Paul Parker, 2003. "Consumers and green electricity: profiling potential purchasers," Business Strategy and the Environment, Wiley Blackwell, vol. 12(1), pages 36-48, January.
    2. Hanley, Nick & Mourato, Susana & Wright, Robert E, 2001. "Choice Modelling Approaches: A Superior Alternative for Environmental Valuation?," Journal of Economic Surveys, Wiley Blackwell, vol. 15(3), pages 435-462, July.
    3. Whitehead, John C. & Cherry, Todd L., 2007. "Willingness to pay for a Green Energy program: A comparison of ex-ante and ex-post hypothetical bias mitigation approaches," Resource and Energy Economics, Elsevier, vol. 29(4), pages 247-261, November.
    4. Borchers, Allison M. & Duke, Joshua M. & Parsons, George R., 2007. "Does willingness to pay for green energy differ by source?," Energy Policy, Elsevier, vol. 35(6), pages 3327-3334, June.
    5. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521766555, January.
    6. Kotchen, Matthew J. & Moore, Michael R., 2007. "Private provision of environmental public goods: Household participation in green-electricity programs," Journal of Environmental Economics and Management, Elsevier, vol. 53(1), pages 1-16, January.
    7. Harrison, Glenn W. & Rutström, E. Elisabet, 2008. "Experimental Evidence on the Existence of Hypothetical Bias in Value Elicitation Methods," Handbook of Experimental Economics Results, in: Charles R. Plott & Vernon L. Smith (ed.), Handbook of Experimental Economics Results, edition 1, volume 1, chapter 81, pages 752-767, Elsevier.
    8. 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.
    9. Matthew J. Kotchen & Michael R. Moore, 2004. "Conservation Behavior: From Voluntary Restraint to a Voluntary Price Premium," Department of Economics Working Papers 2004-16, Department of Economics, Williams College.
    10. Nick Hanley & Susana Mourato & Robert E. Wright, 2001. "Choice Modelling Approaches: A Superior Alternative for Environmental Valuatioin?," Journal of Economic Surveys, Wiley Blackwell, vol. 15(3), pages 435-462, July.
    11. Ryan Wiser & Mark Bolinger & Edward Holt, 2000. "Customer Choice and Green Power Marketing in the United States: How far Can it Take US?," Energy & Environment, , vol. 11(4), pages 461-477, July.
    12. van Engelenburg, B. C. W. & van Rossum, T. F. M. & Blok, K. & Vringer, K., 1994. "Calculating the energy requirments of household purchases : A practical step by step method," Energy Policy, Elsevier, vol. 22(8), pages 648-656, August.
    13. Bird, Lori A. & Holt, Edward & Levenstein Carroll, Ghita, 2008. "Implications of carbon cap-and-trade for US voluntary renewable energy markets," Energy Policy, Elsevier, vol. 36(6), pages 2063-2073, June.
    14. Kim, Hyung Chul & Keoleian, Gregory A. & Horie, Yuhta A., 2006. "Optimal household refrigerator replacement policy for life cycle energy, greenhouse gas emissions, and cost," Energy Policy, Elsevier, vol. 34(15), pages 2310-2323, October.
    15. Brian Byrnes & Clive Jones† & Sandra Goodman‡, 1999. "Contingent Valuation and Real Economic Commitments: Evidence from Electric Utility Green Pricing Programmes," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 42(2), pages 149-166.
    16. John List & Craig Gallet, 2001. "What Experimental Protocol Influence Disparities Between Actual and Hypothetical Stated Values?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 20(3), pages 241-254, November.
    17. Steckel, Joel H & Vanhonacker, Wilfried R, 1988. "A Heterogeneous Conditional Logit Model of Choice," Journal of Business & Economic Statistics, American Statistical Association, vol. 6(3), pages 391-398, July.
    18. Krinsky, Itzhak & Robb, A Leslie, 1991. "Three Methods for Calculating the Statistical Properties of Elasticities: A Comparison," Empirical Economics, Springer, vol. 16(2), pages 199-209.
    19. Wiser, Ryan H. & Fowlie, Meredith & Holt, Edward A., 2001. "Public goods and private interests: understanding non-residential demand for green power," Energy Policy, Elsevier, vol. 29(13), pages 1085-1097, November.
    20. Zarnikau, Jay, 2003. "Consumer demand for `green power' and energy efficiency," Energy Policy, Elsevier, vol. 31(15), pages 1661-1672, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rousseau, Sandra & Vranken, Liesbet, 2013. "Green market expansion by reducing information asymmetries: Evidence for labeled organic food products," Food Policy, Elsevier, vol. 40(C), pages 31-43.
    2. Nienhueser, Ian Andrew & Qiu, Yueming, 2016. "Economic and environmental impacts of providing renewable energy for electric vehicle charging – A choice experiment study," Applied Energy, Elsevier, vol. 180(C), pages 256-268.
    3. Menegaki, Angeliki, N. & Olsen, Søren Bøye & Tsagarakis, Konstantinos P., 2016. "Towards a common standard – A reporting checklist for web-based stated preference valuation surveys and a critique for mode surveys," Journal of choice modelling, Elsevier, vol. 18(C), pages 18-50.
    4. Ladenburg, Jacob & Lutzeyer, Sanja, 2012. "The economics of visual disamenity reductions of offshore wind farms—Review and suggestions from an emerging field," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(9), pages 6793-6802.
    5. Ju-Hee Kim & Hyo-Jin Kim & Seung-Hoon Yoo, 2019. "Willingness to Pay Price Premium for Smartphones Produced Using Renewable Energy," Sustainability, MDPI, vol. 11(6), pages 1-11, March.
    6. Zhou, Shan & Solomon, Barry D., 2021. "The interplay between renewable portfolio standards and voluntary green power markets in the United States," Renewable Energy, Elsevier, vol. 178(C), pages 720-729.
    7. Hyunju Shin & Alexander E. Ellinger & Helenka Hopkins Nolan & Tyler D. DeCoster & Forrest Lane, 2018. "An Assessment of the Association Between Renewable Energy Utilization and Firm Financial Performance," Journal of Business Ethics, Springer, vol. 151(4), pages 1121-1138, September.
    8. Alló, Maria & Loureiro, Maria L., 2014. "The role of social norms on preferences towards climate change policies: A meta-analysis," Energy Policy, Elsevier, vol. 73(C), pages 563-574.
    9. Cheng, Peiyue & Wang, Tingsong, 2023. "Optimizing the emission control policies and trade-in program effects: A carbon-constrained closed-loop supply chain network model," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 179(C).
    10. Nouira, Imen & Frein, Yannick & Hadj-Alouane, Atidel B., 2014. "Optimization of manufacturing systems under environmental considerations for a greenness-dependent demand," International Journal of Production Economics, Elsevier, vol. 150(C), pages 188-198.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Oerlemans, Leon A.G. & Chan, Kai-Ying & Volschenk, Jako, 2016. "Willingness to pay for green electricity: A review of the contingent valuation literature and its sources of error," Renewable and Sustainable Energy Reviews, Elsevier, vol. 66(C), pages 875-885.
    2. Ward, David O. & Clark, Christopher D. & Jensen, Kimberly L. & Yen, Steven T. & Russell, Clifford S., 2011. "Factors influencing willingness-to-pay for the ENERGY STAR® label," Energy Policy, Elsevier, vol. 39(3), pages 1450-1458, March.
    3. Cardella, Eric & Ewing, Bradley T. & Williams, Ryan B., 2017. "Price volatility and residential electricity decisions: Experimental evidence on the convergence of energy generating source," Energy Economics, Elsevier, vol. 62(C), pages 428-437.
    4. Bae, Jeong Hwan & Rishi, Meenakshi, 2018. "Increasing consumer participation rates for green pricing programs: A choice experiment for South Korea," Energy Economics, Elsevier, vol. 74(C), pages 490-502.
    5. Torsten J. Gerpott & Ilaha Mahmudova, 2010. "Determinants of price mark‐up tolerance for green electricity – lessons for environmental marketing strategies from a study of residential electricity customers in Germany," Business Strategy and the Environment, Wiley Blackwell, vol. 19(5), pages 304-318, July.
    6. Gracia, Azucena & Barreiro-Hurlé, Jesús & Pérez y Pérez, Luis, 2012. "Can renewable energy be financed with higher electricity prices? Evidence from a Spanish region," Energy Policy, Elsevier, vol. 50(C), pages 784-794.
    7. Zorić, Jelena & Hrovatin, Nevenka, 2012. "Household willingness to pay for green electricity in Slovenia," Energy Policy, Elsevier, vol. 47(C), pages 180-187.
    8. Garces-Voisenat, Juan-Pedro & Mukherjee, Zinnia, 2016. "Paying for green energy: The case of the Chilean Patagonia," Journal of Policy Modeling, Elsevier, vol. 38(2), pages 397-414.
    9. Soon, Jan-Jan & Ahmad, Siti-Aznor, 2015. "Willingly or grudgingly? A meta-analysis on the willingness-to-pay for renewable energy use," Renewable and Sustainable Energy Reviews, Elsevier, vol. 44(C), pages 877-887.
    10. Longo, Alberto & Markandya, Anil & Petrucci, Marta, 2008. "The internalization of externalities in the production of electricity: Willingness to pay for the attributes of a policy for renewable energy," Ecological Economics, Elsevier, vol. 67(1), pages 140-152, August.
    11. Charles Sims, 2013. "Hypothetical Market Familiarity and the Disconnect Between Stated and Observed Values for Green Energy," International Journal of Energy Economics and Policy, Econjournals, vol. 3(1), pages 10-19.
    12. Dagher, Leila & Bird, Lori & Heeter, Jenny, 2017. "Residential green power demand in the United States," Renewable Energy, Elsevier, vol. 114(PB), pages 1062-1068.
    13. Herbes, Carsten & Friege, Christian & Baldo, Davide & Mueller, Kai-Markus, 2015. "Willingness to pay lip service? Applying a neuroscience-based method to WTP for green electricity," Energy Policy, Elsevier, vol. 87(C), pages 562-572.
    14. Susaeta, Andres & Lal, Pankaj & Alavalapati, Janaki & Mercer, Evan, 2011. "Random preferences towards bioenergy environmental externalities: A case study of woody biomass based electricity in the Southern United States," Energy Economics, Elsevier, vol. 33(6), pages 1111-1118.
    15. Jensen, Kimberly L. & Clark, Christopher D. & English, Burton C. & Menard, R. Jamey & Skahan, Denise K. & Marra, Adrienne C., 2010. "Willingness to pay for E85 from corn, switchgrass, and wood residues," Energy Economics, Elsevier, vol. 32(6), pages 1253-1262, November.
    16. Murakami, Kayo & Ida, Takanori & Tanaka, Makoto & Friedman, Lee, 2015. "Consumers' willingness to pay for renewable and nuclear energy: A comparative analysis between the US and Japan," Energy Economics, Elsevier, vol. 50(C), pages 178-189.
    17. Delmas, Magali A. & Montes-Sancho, Maria J., 2011. "U.S. state policies for renewable energy: Context and effectiveness," Energy Policy, Elsevier, vol. 39(5), pages 2273-2288, May.
    18. Cardella, Eric & Ewing, Brad & Williams, Ryan Blake, 2018. "Green is Good – The Impact of Information Nudges on the Adoption of Voluntary Green Power Plans," 2018 Annual Meeting, February 2-6, 2018, Jacksonville, Florida 266583, Southern Agricultural Economics Association.
    19. Ndebele, Tom & Marsh, Dan, 2014. "Environmental attitude and the demand for green electricity in the context of supplier choice: A case study of the New Zealand retail electricity market," 2014 Conference, August 28-29, 2014, Nelson, New Zealand 188376, New Zealand Agricultural and Resource Economics Society.
    20. Aravena, Claudia & Hutchinson, W. George & Longo, Alberto, 2012. "Environmental pricing of externalities from different sources of electricity generation in Chile," Energy Economics, Elsevier, vol. 34(4), pages 1214-1225.

    More about this item

    Keywords

    Renewable energy; Willingness to pay; Contingent choice;
    All these keywords.

    JEL classification:

    • Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:33:y:2011:i:6:p:1095-1102. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eneco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.