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The value of continuous power supply for Flemish households

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  • Pepermans, Guido

Abstract

This paper estimates the willingness to pay/accept (WTP/WTA) of Flemish households for continuous power supply, based on a stated preference approach. The data were collected via a choice experiment and were then used to estimate a main effects conditional logit model and a random parameter logit model with interaction effects and correlated preferences. Power outages are characterized by 6 attributes: annual frequency, duration, peak or off peak, announced or unannounced, winter or summer and invoice impact. All estimates have the expected sign. The results are used to assess the marginal WTP/WTA for each of these attributes. Overall, the outcome suggests that Flemish households have heterogeneous preferences regarding power outage attributes, and that, due to a status quo bias, only a relatively small share of them is willing to switch to a lower reliability level if this would be compensated by a bill discount.

Suggested Citation

  • Pepermans, Guido, 2011. "The value of continuous power supply for Flemish households," Energy Policy, Elsevier, vol. 39(12), pages 7853-7864.
  • Handle: RePEc:eee:enepol:v:39:y:2011:i:12:p:7853-7864
    DOI: 10.1016/j.enpol.2011.09.032
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    Citations

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    Cited by:

    1. Sagebiel, Julian, 2017. "Preference heterogeneity in energy discrete choice experiments: A review on methods for model selection," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 804-811.
    2. Buryk, Stephen & Mead, Doug & Mourato, Susana & Torriti, Jacopo, 2015. "Investigating preferences for dynamic electricity tariffs: The effect of environmental and system benefit disclosure," Energy Policy, Elsevier, vol. 80(C), pages 190-195.
    3. repec:eee:appene:v:212:y:2018:i:c:p:141-150 is not listed on IDEAS
    4. Woo, C.K. & Ho, T. & Shiu, A. & Cheng, Y.S. & Horowitz, I. & Wang, J., 2014. "Residential outage cost estimation: Hong Kong," Energy Policy, Elsevier, vol. 72(C), pages 204-210.
    5. Johannes Breit & Satoru Komatsu & Shinji Kaneko & Partha Pratim Ghosh, 2016. "Evaluating households’ preferences regarding reducing power outages in rural areas: cases in the Ganges Floodplain in Bangladesh," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 18(1), pages 73-94, February.
    6. Broberg, Thomas & Persson, Lars, 2016. "Is our everyday comfort for sale? Preferences for demand management on the electricity market," Energy Economics, Elsevier, vol. 54(C), pages 24-32.
    7. Pepermans, Guido, 2014. "Valuing smart meters," Energy Economics, Elsevier, vol. 45(C), pages 280-294.

    More about this item

    Keywords

    Power outage; Willingness to pay; Choice experiment;

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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