Equity and the willingness to pay for green electricity in Germany

Mark Andor, Manuel Frondel and Stephan Sommer

No 759, Ruhr Economic Papers from RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen

Abstract: The production of electricity on the basis of renewable energy technologies is a classic example of an impure public good. It is often discriminatively financed by industrial and household consumers, such as in Germany, where the energy-intensive sector benefits from a far-reaching exemption rule, while all other electricity consumers are forced to bear a higher burden. Based on randomized information treatments in a stated-choice experiment among about 11,000 German households, we explore whether this coercive payment rule affects households' willingness-to-pay (WTP) for green electricity. Our central result is that reducing inequity by abolishing the exemption for the energyintensive industry raises households' WTP substantially.

Keywords: stated-choice experiment; behavioral economics; fairness (search for similar items in EconPapers)
JEL-codes: D03 D12 H41 Q20 Q50 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-dcm, nep-ene, nep-env, nep-exp and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (27)

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Journal Article: Equity and the willingness to pay for green electricity in Germany (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:rwirep:759

DOI: 10.4419/86788884

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