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The Cost of Power Outages in the Business and Public Sectors in Israel: Revealed Preference vs. Subjective Valuation

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  • Michael Beenstock
  • Ephraim Goldin
  • Yoel Haitovsky

Abstract

Cross-section data on investment in back-up generators and uninterruptable power supplies (UPS) are used to infer the implied cost of electricity outages in the business and public sectors in Israel. Two-limit tobit models of the demand for back-up are estimated and used to simulate the mitigated and unmitigated cost of power outages. These "revealed preference estimates of outage costs are then compared with estimates based on the method of subjective evaluation.

Suggested Citation

  • Michael Beenstock & Ephraim Goldin & Yoel Haitovsky, 1997. "The Cost of Power Outages in the Business and Public Sectors in Israel: Revealed Preference vs. Subjective Valuation," The Energy Journal, , vol. 18(2), pages 39-61, April.
    • Handle: RePEc:sae:enejou:v:18:y:1997:i:2:p:39-61
    DOI: 10.5547/ISSN0195-6574-EJ-Vol18-No2-3
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    References listed on IDEAS

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    1. Mohan Munasinghe & Mark Gellerson, 1979. "Economic Criteria for Optimizing Power System Reliability Levels," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 353-365, Spring.
    2. 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.
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    Cited by:

    1. Brown, David P. & Muehlenbachs, Lucija, 2024. "The value of electricity reliability: Evidence from battery adoption," Journal of Public Economics, Elsevier, vol. 239(C).

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