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Social demand for electricity from forest biomass in Spain: Does payment periodicity affect the willingness to pay?

  • Soliño, Mario
  • Vázquez, María X.
  • Prada, Albino

In this article, we analyze social preferences for a partial substitution programme of electricity generated by conventional energy sources, for energy generated from a local renewable energy source, such as forest biomass. This analysis sets arguments in favour of accelerating the introduction of this renewable technology in the Spanish Electricity System. Simultaneously, two methodological goals concerning the contingent valuation method are discussed. In the first one, we analyze if there are statistical differences in the willingness to pay (WTP) when a single- or a double-bounded format is employed to ask the valuation question. Results show that WTP estimates from single- and double-bounded significantly differ. In the second one, we analyze the effect of the periodicity of the payment vehicle on the estimates of welfare change. The timeframe specification of the payment vehicle has been scarcely studied, and this fact constitutes the main contribution of this paper to the specialized literature. Results show that periodicity influences upon the probability to favour the proposed change. The periodicity does not affect to the mean WTP obtained in the single-bounded format, but there are statistical differences in the double-bounded format. These results might be explained by the presence of yea saying and payment scale bias.

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Article provided by Elsevier in its journal Energy Policy.

Volume (Year): 37 (2009)
Issue (Month): 2 (February)
Pages: 531-540

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Handle: RePEc:eee:enepol:v:37:y:2009:i:2:p:531-540
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