Households' willingness to pay for safeguarding security of natural gas supply in electricity generation
Security of energy supply is a major issue for all EU Member States due to Europe's increasing dependence on imported fossil-fuel sources and the continuous rise in energy demand. The latter is of particular importance in electricity sector given the continuously increasing use of gas for electricity generation. In order to properly tackle with the problem, concerted actions are required by the EU Member States in several levels, i.e. legislative, political, etc. Nevertheless, these actions will come at an additional cost paid by the society either through increased electricity bills or through public financing for energy security investments. Thus, such policies should be justified on the basis of cost-benefit analysis. Towards this direction, it may be necessary to take into account non-market costs and benefits, i.e. the value that consumers place on interruptions avoided. In order to explore households' perceptions and willingness to pay for securing gas supply for electricity production, an empirical study was conducted by means of the contingent valuation method. The results indicate that consumers are willing to pay a premium on their electricity bills in order to internalize the external costs of electricity production, in terms of energy security, which are caused from imported fuels.
If 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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
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.:
- MacMillan, Douglas & Hanley, Nick & Lienhoop, Nele, 2006. "Contingent valuation: Environmental polling or preference engine?," Ecological Economics, Elsevier, vol. 60(1), pages 299-307, November.
- Bergmann, Ariel & Hanley, Nick & Wright, Robert, 2006. "Valuing the attributes of renewable energy investments," Energy Policy, Elsevier, vol. 34(9), pages 1004-1014, June.
- Li, Hui & Jenkins-Smith, Hank C. & Silva, Carol L. & Berrens, Robert P. & Herron, Kerry G., 2009. "Public support for reducing US reliance on fossil fuels: Investigating household willingness-to-pay for energy research and development," Ecological Economics, Elsevier, vol. 68(3), pages 731-742, January.
- Cho, Seong-Hoon & Newman, David H. & Bowker, J.M., 2005. "Measuring rural homeowners' willingness to pay for land conservation easements," Forest Policy and Economics, Elsevier, vol. 7(5), pages 757-770, August.
- Carson, Richard T & Groves, Theodore, 2010.
"Incentive and Information Properties of Preference Questions,"
University of California at San Diego, Economics Working Paper Series
qt88d8644g, Department of Economics, UC San Diego.
- Richard Carson & Theodore Groves, 2007. "Incentive and informational properties of preference questions," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 37(1), pages 181-210, May.
- Patricia A. Champ & Nicholas E. Flores & Thomas C. Brown & PJames Chivers, 2002. "Contingent Valuation and Incentives," Land Economics, University of Wisconsin Press, vol. 78(4), pages 591-604.
- Green, Donald & Jacowitz, Karen E. & Kahneman, Daniel & McFadden, Daniel, 1998.
"Referendum contingent valuation, anchoring, and willingness to pay for public goods,"
Resource and Energy Economics,
Elsevier, vol. 20(2), pages 85-116, June.
- Donald Green & Karen Jacowitz & Daniel Kahneman & Daniel McFadden, 1995. "Referendum Contingent Valuation, Anchoring, and Willingness to Pay for Public Goods," Working Papers _010, University of California at Berkeley, Econometrics Laboratory Software Archive.
- 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.
- Close, Josie & Pang, Huey & Lam, K.H. & Li, Thomas, 2006. "10% from renewables? The potential contribution from an HK schools PV installation programme," Renewable Energy, Elsevier, vol. 31(11), pages 1665-1672.
- Carlsson, Fredrik & Martinsson, Peter, 2004.
"Willingness to Pay among Swedish Households to Avoid Power Outages - A Random Parameter Tobit Model Approach,"
Working Papers in Economics
154, University of Gothenburg, Department of Economics.
- Fredrik Carlsson & Peter Martinsson, 2007. "Willingness to Pay among Swedish Households to Avoid Power Outages: A Random Parameter Tobit Model Approach," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 75-90.
- Beenstock, Michael & Goldin, Ephraim & Haitovsky, Yoel, 1998. "Response bias in a conjoint analysis of power outages," Energy Economics, Elsevier, vol. 20(2), pages 135-156, April.
- Bateman, Ian J. & Langford, Ian H. & Turner, R. Kerry & Willis, Ken G. & Garrod, Guy D., 1995.
"Elicitation and truncation effects in contingent valuation studies,"
Elsevier, vol. 12(2), pages 161-179, February.
- Langford, Ian H. & Bateman, Ian J., 1996. "Elicitation and truncation effects in contingent valuation studies," Ecological Economics, Elsevier, vol. 19(3), pages 265-267, December.
- Ladenburg, Jacob & Dubgaard, Alex, 2007. "Willingness to pay for reduced visual disamenities from offshore wind farms in Denmark," Energy Policy, Elsevier, vol. 35(8), pages 4059-4071, August.
- Zarnikau, Jay, 2003. "Consumer demand for `green power' and energy efficiency," Energy Policy, Elsevier, vol. 31(15), pages 1661-1672, December.
- 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.
- Nomura, Noboru & Akai, Makoto, 2004. "Willingness to pay for green electricity in Japan as estimated through contingent valuation method," Applied Energy, Elsevier, vol. 78(4), pages 453-463, August.
- van Exel, N.J.A. & Brouwer, W.B.F. & van den Berg, B. & Koopmanschap, M.A., 2006. "With a little help from an anchor: Discussion and evidence of anchoring effects in contingent valuation," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 35(5), pages 836-853, October.
- Richard T. Carson, 1997. "Contingent Valuation: Theoretical Advances and Empirical Tests Since the NOAA Panel," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(5), pages 1501-1507.
- Cameron, Trudy Ann & Huppert, Daniel D., 1989. "OLS versus ML estimation of non-market resource values with payment card interval data," Journal of Environmental Economics and Management, Elsevier, vol. 17(3), pages 230-246, November.
- Hansla, Andre & Gamble, Amelie & Juliusson, Asgeir & Garling, Tommy, 2008. "Psychological determinants of attitude towards and willingness to pay for green electricity," Energy Policy, Elsevier, vol. 36(2), pages 768-774, February.
- Alberto Longo & Anil Markandya & Marta Petrucci, 2006.
"The Internalization of Externalities in The Production of Electricity: Willingness to Pay for the Attributes of a Policy for Renewable Energy,"
2006.132, Fondazione Eni Enrico Mattei.
- 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.
- Weisser, Hellmuth, 2007. "The security of gas supply--a critical issue for Europe?," Energy Policy, Elsevier, vol. 35(1), pages 1-5, January.
- 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.
- Arild Vatn, 2004. "Environmental Valuation and Rationality," Land Economics, University of Wisconsin Press, vol. 80(1), pages 1-18.
- Welsh, Michael P. & Poe, Gregory L., 1998. "Elicitation Effects in Contingent Valuation: Comparisons to a Multiple Bounded Discrete Choice Approach," Journal of Environmental Economics and Management, Elsevier, vol. 36(2), pages 170-185, September.
- Ek, Kristina, 2005. "Public and private attitudes towards "green" electricity: the case of Swedish wind power," Energy Policy, Elsevier, vol. 33(13), pages 1677-1689, September.
- Willis, K. G. & Garrod, G. D., 1997. "Electricity supply reliability : Estimating the value of lost load," Energy Policy, Elsevier, vol. 25(1), pages 97-103, January.
- 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.
- Reymond, Mathias, 2007. "European key issues concerning natural gas: Dependence and vulnerability," Energy Policy, Elsevier, vol. 35(8), pages 4169-4176, August.
- Bishwanath Goldar & Smita Misra, 2001. "Valuation of Environmental Goods: Correcting for Bias in Contingent Valuation Studies Based on Willingness-to-Accept," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(1), pages 150-156.
- 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.
- Laura Westra, 2000. "The Disvalue of 'Contingent Valuation' and the Problem of the 'Expectation Gap'," Environmental Values, White Horse Press, vol. 9(2), pages 153-171, May.
When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:37:y:2009:i:5:p:2008-2017. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.