The value of continuous power supply for Flemish households

This paper estimates the willingness to pay/accept (WTP/WTA) of Flemish households for continuous power supply, based on a stated preference approach. The data were collected via a choice experiment and were then used to estimate a main effects conditional logit model and a random parameter logit mo...

Full description

Saved in:
Bibliographic Details
Published in:Energy policy 2011-12, Vol.39 (12), p.7853-7864
Main Author: Pepermans, Guido
Format: Article
Language:English
Subjects:
Applied sciences
Belgium
Blackouts
Choice experiment
Economic data
Electric energy
Electric power
Energy
Energy consumption
Energy economics
Energy efficiency
Energy industry
Energy market
Energy policy
Energy prices
Energy resources
Estimates
Estimation
Exact sciences and technology
General, economic and professional studies
Households
logit analysis
Logit models
Methodology. Modelling
Netherlands
Outages
Power outage
Power supplies
Power supply
Preferences
Studies
summer
Switches
Value
Willingness to pay
Winter
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:This paper estimates the willingness to pay/accept (WTP/WTA) of Flemish households for continuous power supply, based on a stated preference approach. The data were collected via a choice experiment and were then used to estimate a main effects conditional logit model and a random parameter logit model with interaction effects and correlated preferences. Power outages are characterized by 6 attributes: annual frequency, duration, peak or off peak, announced or unannounced, winter or summer and invoice impact. All estimates have the expected sign. The results are used to assess the marginal WTP/WTA for each of these attributes. Overall, the outcome suggests that Flemish households have heterogeneous preferences regarding power outage attributes, and that, due to a status quo bias, only a relatively small share of them is willing to switch to a lower reliability level if this would be compensated by a bill discount. ► Choice experiment data is collected for the Flemish residential sector. ► A main effects conditional logit and random parameter logit model are estimated. ► Households have heterogeneous preferences regarding all power outage attributes. ► WTA values for reduced reliability levels are calculated. ► Only small share of households is willing to switch due to status quo bias.
ISSN:0301-4215
1873-6777
DOI:10.1016/j.enpol.2011.09.032