Willingness to Pay for Renewably-Sourced Home Heating in the Fairbanks North Star Borough

Georgia K. Roberts, Dominique J. Pride, Joseph M. Little () and Julie Mueller
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Georgia K. Roberts: School of Earth and Sustainability, Northern Arizona University, Flagstaff, AZ 86011, USA
Dominique J. Pride: Alaska Center for Energy and Power, University of Alaska Fairbanks, Fairbanks, AK 99775, USA
Joseph M. Little: W.A. Franke College of Business, Northern Arizona University, Flagstaff, AZ 86011, USA

Energies, 2023, vol. 16, issue 8, 1-14

Abstract: Space heating is a necessity in Alaska; however, the use of heating fuels carries both economic and environmental costs. In the Fairbanks North Star Borough (FNSB), Alaska, most households utilize heating fuel oil as a primary source for home heating and firewood as a secondary source. In the FNSB, wood-burning devices are the principal source of fine particulate matter with a size of 2.5 microns or less, (PM 2.5 ), but firewood is less expensive when compared to heating fuel oil. The FNSB has been designated as a nonattainment area for PM 2.5 , which has been linked to negative cardiopulmonary impacts and other adverse health consequences. Electric thermal storage heaters (ETSH) could help solve the PM 2.5 problem by displacing firewood used for residential space heating. We use dichotomous choice contingent valuation (DC-CV) to estimate willingness to pay ( WTP ) for an ETSH program which would allow FNSB residents to offset 100 gallons of heating fuel oil annually. Certainty correction is used to control for the presence of hypothetical bias. We find median WTP is USD 33.98 without certainty correction and USD 9.75 with certainty correction. Our results indicate that implementation of a special ETSH electricity rate based on the WTP estimate may lead to broader adoption of ETSH for space heating, which could improve air quality, reduce fuel poverty, and reduce the carbon footprint of residential space heating.

Keywords: contingent valuation; willingness to pay; home heating; air quality (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2023
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