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Exploring the Spatial Heterogeneity of Individual Preferences for Ambient Heating Systems

Listed author(s):
  • Cristiano Franceschinis

    ()

    (Department of Land, Environment, Agriculture and Forestry, University of Padova, 35122 Padova, Italy)

  • Riccardo Scarpa

    ()

    (Durham University Business School, Durham University, DH1 3LB Durham, UK
    Department of Economics, Waikato Management School, University of Waikato, 3216 Hamilton, New Zealand
    Department of Business Economics, University of Verona, 37129 Verona, Italy)

  • Mara Thiene

    ()

    (Department of Land, Environment, Agriculture and Forestry, University of Padova, 35122 Padova, Italy)

  • John Rose

    ()

    (Institute for Choice, University of South Australia, SA 5001 Adelaide, Australia)

  • Michele Moretto

    ()

    (Department of Economics and Management, University of Padova, 35122 Padova, Italy)

  • Raffaele Cavalli

    ()

    (Department of Land, Environment, Agriculture and Forestry, University of Padova, 35122 Padova, Italy)

The estimation and policy use of spatially explicit discrete choice models has yet to receive serious attention from practitioners. In this study we aim to analyze how geographical variables influence individuals’ sensitivity to key features of heating systems, namely investment cost and CO 2 emissions. This is of particular policy interest as heating systems are strongly connected to two major current environmental issues: emissions of pollutants and increased use of renewable resources. We estimate a mixed logit model (MXL) to spatially characterize preference heterogeneity in the mountainous North East of Italy. Our results show that geographical variables are significant sources of variation of individual’s sensitivity to the investigated attributes of the system. We generate maps to show how the willingness to pay to avoid CO 2 emissions varies across the region and to validate our estimates ex-post . We discuss why this could be a promising approach to inform applied policy decisions.

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Article provided by MDPI, Open Access Journal in its journal Energies.

Volume (Year): 9 (2016)
Issue (Month): 6 (May)
Pages: 1-19

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Handle: RePEc:gam:jeners:v:9:y:2016:i:6:p:407-:d:70766
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