Willingly or grudgingly? A meta-analysis on the willingness-to-pay for renewable energy use

Jan-Jan Soon and Siti-Aznor Ahmad

Renewable and Sustainable Energy Reviews, 2015, vol. 44, issue C, 877-887

Abstract: With global and regional communities outlining their goals for RES use, such as the European Union issuing the Renewable Energy Directive mandating its member countries to achieve a 20% overall share of renewable energy by 2020, it is undoubtedly an important source of energy in the near future. Ultimately however, it boils down to how willing households are in migrating to its use from conventional energy sources. Numerous valuation studies have been done to estimate the willingness-to-pay (WTP) for RES, but these studies do not seem to reach a reasonable consensus on how much households are actually willing to pay. Their findings vary considerably due to differences in, among others, sampling designs, valuation techniques, and types of renewable energy. To address this issue, the main objectives of our paper are to calculate a summary WTP estimate from the many reported estimates, and to explain the determinants of variations in WTP. Using a random-effect meta-analytic approach, we obtain a summary WTP estimate of USD7.16. On average, households are willing to pay an increase of this amount per month over the price of energy they are currently paying for, to shift to RES use. We then specify a random-effect meta-regression model to explain the variations in the households’ WTP. From our model, we find metropolitan residents and North American households to have higher WTP than their rural and Asian counterparts. We also find evidence of genuine underlying empirical effects that more and more households are increasingly willing to pay for RES use. The types of RES do not appear to have any impact on WTP.

Keywords: Renewable energy source (RES); Energy use; Willingness-to-pay (WTP); Meta-analysis; Meta-regression (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (64)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1364032115000519
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:rensus:v:44:y:2015:i:c:p:877-887

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/journaldescription.cws_home/600126/bibliographic
http://www.elsevier. ... 600126/bibliographic

DOI: 10.1016/j.rser.2015.01.041

Access Statistics for this article

Renewable and Sustainable Energy Reviews is currently edited by L. Kazmerski

More articles in Renewable and Sustainable Energy Reviews from Elsevier
Bibliographic data for series maintained by Catherine Liu ().