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Residential preferences for stable electricity supply and a reduction in air pollution risk: A benefit transfer study using choice modeling in China

  • Taro Ohdoko

    (Faculty of Economics, Department of Management Science, Dokkyo University)

  • Satoru Komatsu

    (Graduate School for International Development and Cooperation, Hiroshima University)

  • Shinji Kaneko

    (Graduate School for International Development and Cooperation, Hiroshima University)

This paper uses choice modeling surveys from the Chinese cities of Jiujiang, Jiangxi Province, and Changsha, Hunan Province, to identify residential preferences for simultaneously increasing the stability of the electricity supply and decreasing the health risks from air pollution. Air pollution in China is mainly attributable to externalities associated with the electricity supply. We employ a contingent ranking approach as our choice modeling method and test for the transfer of benefits for these preferences between the two sites. The original benefit estimates indicate that the implicit price for reducing the number of power breakdowns is about RMB83 /(times*year*household) in Jiujiang and RMB78/(times*year*household) in Changsha, while the implicit price for reducing the duration of power breakdowns is statistically zero in Jiujiang and RMB71/(hours*year*household) in Changsha. From the alternative perspective, we estimate that the annualized value of the statistical lifetime risk of cancer caused by air pollution over a 70-year period is RMB50,844/year in Jiujiang and RMB67,146/year in Changsha. This suggests that we do not reject benefit transferability based on the implicit price of the number of power breakdowns, but do reject it based on the number of deaths from cancer caused by air pollution.

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File URL: http://ir.lib.hiroshima-u.ac.jp/files/public/33063/20141016192343975418/IDEC-DP2_02-12.pdf
File Function: First version, 2012
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Paper provided by Hiroshima University, Graduate School for International Development and Cooperation (IDEC) in its series IDEC DP2 Series with number 2-12.

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Length: 35 pages
Date of creation: Jun 2012
Date of revision:
Handle: RePEc:hir:idecdp:2-12
Contact details of provider: Web page: http://www.hiroshima-u.ac.jp/en/idec/

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