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Random preferences towards bioenergy environmental externalities: A case study of woody biomass based electricity in the Southern United States

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  • Susaeta, Andres
  • Lal, Pankaj
  • Alavalapati, Janaki
  • Mercer, Evan

Abstract

This paper contrasts alternate methodological approaches of investigating public preferences, the random parameter logit (RPL) where tastes and preferences of respondents are assumed to be heterogeneous and the conditional logit (CL) approach where tastes and preferences remain fixed for individuals. We conducted a choice experiment to assess preferences for woody biomass based electricity in Arkansas, Florida, and Virginia. Reduction of CO2 emissions and improvement of forest habitat by decreasing risk of wildfires and pest outbreaks were presented to respondents as attributes of using green electricity. The results indicate that heterogeneous preferences might be a better fit for assessing preferences for green electricity. All levels of both attributes were positive contributors to welfare but they were no statistically significant. Respondents expressed a positive mean marginal willingness to pay (WTP) for each attribute level. The total WTP for green electricity per kilowatt hour was $0.049kWh or $40.5 per capita year−1 when converted into future total annual expenditures.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:eneeco:v:33:y:2011:i:6:p:1111-1118
    DOI: 10.1016/j.eneco.2011.05.015
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    Cited by:

    1. Campbell, Robert & Venn, Tyron & Anderson, Nathaniel, 2015. "Quantifying Social Preferences toward Woody Biomass Energy Generation in Montana, USA," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205678, Agricultural and Applied Economics Association;Western Agricultural Economics Association.
    2. 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.
    3. Ladenburg, Jacob, 2014. "Dynamic properties of the preferences for renewable energy sources – A wind power experience-based approach," Energy, Elsevier, vol. 76(C), pages 542-551.
    4. Popkin, Jennifer H. & Duke, Joshua M. & Borchers, Allison M. & Ilvento, Thomas, 2013. "Social costs from proximity to hydraulic fracturing in New York State," Energy Policy, Elsevier, vol. 62(C), pages 62-69.
    5. 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.
    6. repec:fan:efeefe:v:html10.3280/efe2017-001013 is not listed on IDEAS
    7. Brennan, Noreen & Van Rensburg, Thomas M, 2016. "Wind farm externalities and public preferences for community consultation in Ireland: A discrete choice experiments approach," Energy Policy, Elsevier, vol. 94(C), pages 355-365.
    8. Campbell, Robert M. & Venn, Tyron J. & Anderson, Nathaniel M., 2016. "Social preferences toward energy generation with woody biomass from public forests in Montana, USA," Forest Policy and Economics, Elsevier, vol. 73(C), pages 58-67.
    9. Ma, Chunbo & Rogers, Abbie A. & Kragt, Marit E. & Zhang, Fan & Polyakov, Maksym & Gibson, Fiona & Chalak, Morteza & Pandit, Ram & Tapsuwan, Sorada, 2015. "Consumers’ willingness to pay for renewable energy: A meta-regression analysis," Resource and Energy Economics, Elsevier, vol. 42(C), pages 93-109.
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    12. Sundt, Swantje & Rehdanz, Katrin, 2015. "Consumers' willingness to pay for green electricity: A meta-analysis of the literature," Energy Economics, Elsevier, vol. 51(C), pages 1-8.
    13. 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.
    14. Vecchiato, Daniel & Tempesta, Tiziano, 2015. "Public preferences for electricity contracts including renewable energy: A marketing analysis with choice experiments," Energy, Elsevier, vol. 88(C), pages 168-179.
    15. Kaenzig, Josef & Heinzle, Stefanie Lena & Wüstenhagen, Rolf, 2013. "Whatever the customer wants, the customer gets? Exploring the gap between consumer preferences and default electricity products in Germany," Energy Policy, Elsevier, vol. 53(C), pages 311-322.
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    18. Lim, Seul-Ye & Lim, Kyoung-Min & Yoo, Seung-Hoon, 2014. "External benefits of waste-to-energy in Korea: A choice experiment study," Renewable and Sustainable Energy Reviews, Elsevier, vol. 34(C), pages 588-595.
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    More about this item

    Keywords

    Choice experiment; Willingness to pay; Woody biomass; Electricity;

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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