Analyzing Korean consumers’ latent preferences for electricity generation sources with a hierarchical Bayesian logit model in a discrete choice experiment

• Published in: Energy policy 2017-06, Vol.105, p.294-302
• Main Authors: Byun, Hyunsuk, Lee, Chul-Yong
• Format: Article
• Language: English
• Subjects: Bayesian analysis; Consumer behavior; Consumers; Consumers’ preference; Discrete choice; Discrete choice experiment; Economic models; Electricity; Electricity consumption; Electricity generation; Energy; Energy policy; Hazards; Hierarchical Bayesian logit model; Marginal utility; Nuclear electric power generation; Nuclear energy; Power; Power consumption; Renewable energy
• ISSN: 0301-4215; 1873-6777
• DOI: 10.1016/j.enpol.2017.02.055

Generally, consumers use electricity without considering the source the electricity was generated from. Since different energy sources exert varying effects on society, it is necessary to analyze consumers’ latent preference for electricity generation sources. The present study estimates Korean consumers’ marginal utility and an appropriate generation mix is derived using the hierarchical Bayesian logit model in a discrete choice experiment. The results show that consumers consider the danger posed by the source of electricity as the most important factor among the effects of electricity generation sources. Additionally, Korean consumers wish to reduce the contribution of nuclear power from the existing 32–11%, and increase that of renewable energy from the existing 4–32%. •We derive an electricity mix reflecting Korean consumers’ latent preferences.•We use the discrete choice experiment and hierarchical Bayesian logit model.•The danger posed by the generation source is the most important attribute.•The consumers wish to increase the renewable energy proportion from 4.3% to 32.8%.•Korea's cost-oriented energy supply policy and consumers’ preference differ markedly.