The value of continuous power supply for Flemish households
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.
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.:
- Hsu, George J. Y. & Chang, Pao-long & Chen, Tser-yieth, 1994. "Various methods for estimating power outage costs : Some implications and results in Taiwan," Energy Policy, Elsevier, vol. 22(1), pages 69-74, January.
- Arne Risa Hole, 2007.
"A comparison of approaches to estimating confidence intervals for willingness to pay measures,"
John Wiley & Sons, Ltd., vol. 16(8), pages 827-840.
- Arne Risa Hole, 2006. "A comparison of approaches to estimating confidence intervals for willingness to pay measures," Working Papers 008cherp, Centre for Health Economics, University of York.
- John List & Craig Gallet, 2001. "What Experimental Protocol Influence Disparities Between Actual and Hypothetical Stated Values?," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 20(3), pages 241-254, November.
- de Nooij, Michiel & Koopmans, Carl & Bijvoet, Carlijn, 2007. "The value of supply security: The costs of power interruptions: Economic input for damage reduction and investment in networks," Energy Economics, Elsevier, vol. 29(2), pages 277-295, March.
- Serra, Pablo & Fierro, Gabriel, 1997.
"Outage costs in Chilean industry,"
Elsevier, vol. 19(4), pages 417-434, October.
- Carlsson, Fredrik & Martinsson, Peter, 2008.
"Does it matter when a power outage occurs? -- A choice experiment study on the willingness to pay to avoid power outages,"
Elsevier, vol. 30(3), pages 1232-1245, May.
- Carlsson, Fredrik & Martinsson, Peter, 2004. "Does it Matter When a Power Outage Occurs? - A Choice Experiment Study on the Willingness to Pay to Avoid Power Outages," Working Papers in Economics 155, University of Gothenburg, Department of Economics.
- Chiara M. Travisi & Peter Nijkamp & Raymond J. G. M. Florax, 2004.
"A Meta-Analysis of the Willingness to Pay for Reductions in Pesticide Risk Exposure,"
2004.101, Fondazione Eni Enrico Mattei.
- Raymond J. G. M. Florax & Chiara M. Travisi & Peter Nijkamp, 2005. "A meta-analysis of the willingness to pay for reductions in pesticide risk exposure," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 32(4), pages 441-467, December.
- Florax, Raymond J.G.M. & Travisi, Chiara M. & Nijkamp, Peter, 2005. "A Meta-Analysis of the Willingness to Pay for Reductions in Pesticide Risk Exposure," 2005 Annual meeting, July 24-27, Providence, RI 19524, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Douglas W. Caves & Joseph A. Herriges & Robert J. Windle, 1992. "The Cost of Electric Power Interruptions in the Industrial Sector: Estimates Derived from Interruptible Service Programs," Land Economics, University of Wisconsin Press, vol. 68(1), pages 49-61.
- Moore, Rebecca, 2008. "Using Attitudes to Characterize Heterogeneous Preferences," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6488, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- 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.
- M. Munasinghe & A. Sanghvi, 1988. "Reliability of Electricity Supply, Outage Costs and Value of Service: An Overview," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 1-18.
- Daniel McFadden & Kenneth Train, 2000. "Mixed MNL models for discrete response," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(5), pages 447-470.
- Woo, C.K. & Kollman, E. & Orans, R. & Price, S. & Horii, B., 2008. "Now that California has AMI, what can the state do with it?," Energy Policy, Elsevier, vol. 36(4), pages 1366-1374, April.
- Abdullah, Sabah & Mariel, Petr, 2010. "Choice experiment study on the willingness to pay to improve electricity services," Energy Policy, Elsevier, vol. 38(8), pages 4570-4581, August.
- Ajodhia, Virendra & Hakvoort, Rudi, 2005. "Economic regulation of quality in electricity distribution networks," Utilities Policy, Elsevier, vol. 13(3), pages 211-221, September.
- Herriges, Joseph A. & Caves, Douglas W. & Windle, R. J., 1990.
"Customer Demand for Service Reliability in the Electric Power Industry: A Synthesis of the Outage Cost Literature,"
Staff General Research Papers
10790, Iowa State University, Department of Economics.
- Caves, Douglas W & Herriges, Joseph A & Windle, Robert J, 1990. "Customer Demand for Service Reliability in the Electric Power Industry: A Synthesis of the Outage Cost Literature," Bulletin of Economic Research, Wiley Blackwell, vol. 42(2), pages 79-119, April.
- James Murphy & P. Allen & Thomas Stevens & Darryl Weatherhead, 2005. "A Meta-analysis of Hypothetical Bias in Stated Preference Valuation," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 30(3), pages 313-325, 03.
- Provencher, Bill & Bishop, R.C.Richard C., 2004. "Does accounting for preference heterogeneity improve the forecasting of a random utility model? A case study," Journal of Environmental Economics and Management, Elsevier, vol. 48(1), pages 793-810, July.
- Horowitz, John K. & McConnell, Kenneth E., 2002. "A Review of WTA/WTP Studies," Journal of Environmental Economics and Management, Elsevier, vol. 44(3), pages 426-447, November.
- Woo, Chi-Keung & Pupp, Roger L., 1992. "Costs of service disruptions to electricity consumers," Energy, Elsevier, vol. 17(2), pages 109-126.
- David Hensher & William Greene, 2003. "The Mixed Logit model: The state of practice," Transportation, Springer, vol. 30(2), pages 133-176, May.
- Edward Morey & Kathleen Greer Rossmann, 2003. "Using Stated-Preference Questions to Investigate Variations in Willingness to Pay for Preserving Marble Monuments: Classic Heterogeneity, Random Parameters, and Mixture Models," Journal of Cultural Economics, Springer, vol. 27(3), pages 215-229, November.
- Hartman, Raymond S & Doane, Michael J & Woo, Chi-Keung, 1991. "Consumer Rationality and the Status Quo," The Quarterly Journal of Economics, MIT Press, vol. 106(1), pages 141-62, February.
- Carlsson, Fredrik & Martinsson, Peter, 2006. "Do Experience and Cheap Talk influence Willingness to Pay in an Open-Ended Contingent Valuation Survey?," Working Papers in Economics 190, University of Gothenburg, Department of Economics.
- Edward Morey & Jennifer Thacher & William Breffle, 2006. "Using Angler Characteristics and Attitudinal Data to Identify Environmental Preference Classes: A Latent-Class Model," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 34(1), pages 91-115, 05.
- Peter Boxall & Wiktor Adamowicz, 2002. "Understanding Heterogeneous Preferences in Random Utility Models: A Latent Class Approach," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 23(4), pages 421-446, December.
When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:39:y:2011:i:12:p:7853-7864. 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 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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.