Quantifying landscape externalities of renewable energy development: Implications of attribute cut-offs in choice experiments

Malte Oehlmann, Klaus Glenk, Patrick Lloyd-Smith and Jürgen Meyerhoff

Resource and Energy Economics, 2021, vol. 65, issue C

Abstract: Renewable energy is worldwide seen as a key element necessary to address climate change. However, finding socially acceptable locations for renewable energy facilities and the accompanying infrastructure increasingly often faces fierce opposition. This paper quantifies the landscape externalities of renewable energies employing a choice experiment. In addition, it is investigated how accounting for non-compensatory choice behavior, i.e. attribute cut-offs, affects welfare measures and subsequently policy recommendations. The empirical application is Germany where we conducted a nationwide survey on the development of renewable energies. We first show that cut-off elicitation questions prior to the choice experiment at least partially influence preferences. We further find that most participants state cut-off levels for attributes. Many are, however, at the same time willing to violate the self-imposed thresholds when choosing among the alternatives. To account for this effect, stated cut-offs are incorporated into a mixed logit model following the soft cut-off approach. Model results indicate substantial taste heterogeneity in preferences and in the use of cutoffs. Also, welfare estimates are substantially affected. We conclude that welfare changes from renewable energy development could be strongly underestimated when cut-offs are ignored.

Keywords: Renewable energy facilities; Landscape externalities; Choice experiment; Decision heuristics; Attribute cut-offs (search for similar items in EconPapers)
JEL-codes: D61 H41 H51 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:resene:v:65:y:2021:i:c:s0928765521000257

DOI: 10.1016/j.reseneeco.2021.101240

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