IDEAS home Printed from https://ideas.repec.org/a/sae/enejou/v30y2009i2p135-154.html
   My bibliography  Save this article

Willingness to Pay for Energy Conservation and Free-Ridership on Subsidization: Evidence from Germany

Author

Listed:
  • Peter Grösche
  • Colin Vance

Abstract

Understanding the determinants of home-efficiency improvements is significant to a range of energy policy issues, including the reduction of fossil fuel use and environmental protection. This paper analyzes retrofit choices by assembling a unique data set merging a nationwide household survey from Germany with regional data on wages and construction costs. To explore the influence of both heterogeneous preferences and correlation among the utility of alternatives, we estimate conditional-, random parameters-, and error components logit models that parameterize the influence of costs, energy savings, and household-level socioeconomic attributes on the likelihood of undertaking one of 16 renovation options. We use the model coefficients to derive household-specific marginal Willingness to Pay estimates, and with these assess the extent to which free-ridership may undermine the effectiveness of recently implemented programs that subsidize the costs of retrofits.

Suggested Citation

  • Peter Grösche & Colin Vance, 2009. "Willingness to Pay for Energy Conservation and Free-Ridership on Subsidization: Evidence from Germany," The Energy Journal, , vol. 30(2), pages 135-154, April.
    • Handle: RePEc:sae:enejou:v:30:y:2009:i:2:p:135-154
    DOI: 10.5547/ISSN0195-6574-EJ-Vol30-No2-7
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.5547/ISSN0195-6574-EJ-Vol30-No2-7
    Download Restriction: no
    File URL: https://libkey.io/10.5547/ISSN0195-6574-EJ-Vol30-No2-7?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Brownstone, David & Train, Kenneth, 1998. "Forecasting new product penetration with flexible substitution patterns," Journal of Econometrics, Elsevier, vol. 89(1-2), pages 109-129, November.
    2. Paul L. Joskow & Donald B. Marron, 1992. "What Does a Negawatt Really Cost? Evidence from Utility Conservation Programs," The Energy Journal, , vol. 13(4), pages 41-74, October.
    3. David A. Hensher & Stewart Jones & William H. Greene, 2007. "An Error Component Logit Analysis of Corporate Bankruptcy and Insolvency Risk in Australia," The Economic Record, The Economic Society of Australia, vol. 83(260), pages 86-103, March.
    4. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521766555, November.
    5. Banfi, Silvia & Farsi, Mehdi & Filippini, Massimo & Jakob, Martin, 2008. "Willingness to pay for energy-saving measures in residential buildings," Energy Economics, Elsevier, vol. 30(2), pages 503-516, March.
    6. King, Gary & Honaker, James & Joseph, Anne & Scheve, Kenneth, 2001. "Analyzing Incomplete Political Science Data: An Alternative Algorithm for Multiple Imputation," American Political Science Review, Cambridge University Press, vol. 95(1), pages 49-69, March.
    7. Cameron, Trudy Ann, 1985. "A Nested Logit Model of Energy Conservation Activity by Owners of Existing Single Family Dwellings," The Review of Economics and Statistics, MIT Press, vol. 67(2), pages 205-211, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nauleau, Marie-Laure & Giraudet, Louis-Gaëtan & Quirion, Philippe, 2018. "Energy efficiency subsidies with price-quality discrimination," OSF Preprints 5emgn_v1, Center for Open Science.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Peter Grosche & Colin Vance, 2009. "Willingness to Pay for Energy Conservation and Free-Ridership on Subsidization: Evidence from Germany," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 135-154.
    2. Peter Grösche & Colin Vance, 2008. "Willingness-to-Pay for Energy Conservation and Free-Ridership on Subsidization – Evidence from Germany," Ruhr Economic Papers 0058, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    3. repec:zbw:rwirep:0058 is not listed on IDEAS
    4. Achtnicht, Martin & Madlener, Reinhard, 2014. "Factors influencing German house owners' preferences on energy retrofits," Energy Policy, Elsevier, vol. 68(C), pages 254-263.
    5. Grösche Peter & Schmidt Christoph M. & Vance Colin, 2013. "Identifying Free-riding in Home Renovation Programs Using Revealed Preference Data," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 233(5-6), pages 600-618, October.
    6. Cristiano Franceschinis & Riccardo Scarpa & Mara Thiene & John Rose & Michele Moretto & Raffaele Cavalli, 2016. "Exploring the Spatial Heterogeneity of Individual Preferences for Ambient Heating Systems," Energies, MDPI, vol. 9(6), pages 1-19, May.
    7. Achtnicht, Martin, 2011. "Do environmental benefits matter? Evidence from a choice experiment among house owners in Germany," Ecological Economics, Elsevier, vol. 70(11), pages 2191-2200, September.
    8. Richard G. Newell & Juha Siikamäki, 2014. "Nudging Energy Efficiency Behavior: The Role of Information Labels," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 1(4), pages 555-598.
    9. Takanori Ida & Kayo Murakami & Makoto Tanaka, 2012. "Keys to Smart Home Diffusion: A Stated Preference Analysis of Smart Meters, Photovoltaic Generation, and Electric/Hybrid Vehicles," Discussion papers e-11-011, Graduate School of Economics Project Center, Kyoto University.
    10. Wasi, Nada & Carson, Richard T., 2013. "The influence of rebate programs on the demand for water heaters: The case of New South Wales," Energy Economics, Elsevier, vol. 40(C), pages 645-656.
    11. Amador, Francisco Javier & González, Rosa Marina & Ramos-Real, Francisco Javier, 2013. "Supplier choice and WTP for electricity attributes in an emerging market: The role of perceived past experience, environmental concern and energy saving behavior," Energy Economics, Elsevier, vol. 40(C), pages 953-966.
    12. Dan Marsh & Lena Mkwara & Riccardo Scarpa, 2011. "Do Respondents’ Perceptions of the Status Quo Matter in Non-Market Valuation with Choice Experiments? An Application to New Zealand Freshwater Streams," Sustainability, MDPI, vol. 3(9), pages 1-23, September.
    13. Paleti, Rajesh, 2018. "Generalized multinomial probit Model: Accommodating constrained random parameters," Transportation Research Part B: Methodological, Elsevier, vol. 118(C), pages 248-262.
    14. Frick, Bernd & Barros, Carlos Pestana & Prinz, Joachim, 2010. "Analysing head coach dismissals in the German "Bundesliga" with a mixed logit approach," European Journal of Operational Research, Elsevier, vol. 200(1), pages 151-159, January.
    15. Meredith Fowlie, 2010. "Emissions Trading, Electricity Restructuring, and Investment in Pollution Abatement," American Economic Review, American Economic Association, vol. 100(3), pages 837-869, June.
    16. Weiss, Adam & Habib, Khandker Nurul, 2017. "Examining the difference between park and ride and kiss and ride station choices using a spatially weighted error correlation (SWEC) discrete choice model," Journal of Transport Geography, Elsevier, vol. 59(C), pages 111-119.
    17. Carlos Barros, 2012. "Sustainable Tourism in Inhambane-Mozambique," CEsA Working Papers 105, CEsA - Centre for African and Development Studies.
    18. Bernard Fortin & Nicolas Jacquemet & Bruce Shearer, 2008. "Policy Analysis in Health-Services Market: Accounting for Quality and Quantity," Annals of Economics and Statistics, GENES, issue 91-92, pages 293-319.
    19. Jürgen Meyerhoff & Ulf Liebe, 2009. "Status Quo Effect in Choice Experiments: Empirical Evidence on Attitudes and Choice Task Complexity," Land Economics, University of Wisconsin Press, vol. 85(3), pages 515-528.
    20. Basu, Debasis & Hunt, John Douglas, 2012. "Valuing of attributes influencing the attractiveness of suburban train service in Mumbai city: A stated preference approach," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(9), pages 1465-1476.
    21. repec:zbw:rwirep:0099 is not listed on IDEAS
    22. Deka, Devajyoti & Carnegie, Jon, 2021. "Predicting transit mode choice of New Jersey workers commuting to New York City from a stated preference survey," Journal of Transport Geography, Elsevier, vol. 91(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:enejou:v:30:y:2009:i:2:p:135-154. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.