Expected willingness to pay for wind energy in Atlantic Canada

Prosper Senyo Koto and Emmanuel Yiridoe

Energy Policy, 2019, vol. 129, issue C, 80-88

Abstract: We investigate the demand-side of wind energy in three provinces in Atlantic Canada, including New Brunswick, Nova Scotia and Prince Edward Island. Empirical questions addressed include: (i) What are the determinants of the probability of paying a non-zero premium for electricity generated using wind technology?; (ii) Given participation, what drives how much more households are willing to pay a month, and what is the monthly premium or expected willingness-to-pay (WTP)?; and (iii) Is there heterogeneity in the expected WTP? The study design follows the contingent valuation framework and the survey questionnaire follows a payment-scale format, reducing the starting point bias and reduces the incidence of item non-response. The data is from a stratified random sample. We employ two-stage models, Cragg's hurdle and the two-part econometric models in the analysis. Scope and 0 WTP effects are explicitly explored. We find that the overall probability of participation is 0.73. University education, income, residential property ownership, concerns about the presence of wind turbines in neighborhoods, and externality affect the likelihood of participation. Households are willing to pay 14% more per month in energy bill for wind power. There is evidence of scope sensitivity. The results provide insights on what proportion of the population will participate and how much more they are willing to pay for wind energy.

Keywords: Willingness-to-pay; Two-part model; Hurdle modelling; Wind energy; Externalities; Atlantic Canada (search for similar items in EconPapers)
JEL-codes: C31 C50 C51 Q40 Q42 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301421519300916
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:enepol:v:129:y:2019:i:c:p:80-88

DOI: 10.1016/j.enpol.2019.02.009

Access Statistics for this article

Energy Policy is currently edited by N. France

More articles in Energy Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().