Evaluating Residential Consumers’ Willingness to Pay to Avoid Power Outages in South Korea
Ju-Hee Kim (),
Kyung-Kyu Lim () and
Seung-Hoon Yoo ()
Additional contact information
Ju-Hee Kim: Department of Energy Policy, Graduate School of Energy & Environment, Seoul National University of Science & Technology, 232 Gongreung-Ro, Nowon-Gu, Seoul 01811, Korea
Kyung-Kyu Lim: Department of Energy Policy, Graduate School of Energy & Environment, Seoul National University of Science & Technology, 232 Gongreung-Ro, Nowon-Gu, Seoul 01811, Korea
Sustainability, 2019, vol. 11, issue 5, 1-12
South Korea experienced a nationwide rolling blackout in 2011 due to a rapid increase in the power demand and a lack of power supply facilities. In particular, the residential sector suffered from considerable inconveniences due to power outages, such as the interruption of elevators’ operation and the stopping of all electronic appliances. Since then, ensuring a stable supply of electricity has emerged as an important task. This note aims to analyze residential consumers’ willingness to pay (WTP) to avoid power outages. For this purpose, 1000 households were surveyed, applying the contingent valuation (CV) method during May 2018. The respondents understood the CV question well and gave meaningful answers. The results show that the mean of households’ monthly WTP amounts to KRW 1522 (USD 1.41). This value is statistically significant. Converting it into an annual value and then expanding the value to the country indicate that the annual national value amounts to KRW 360.7 billion (USD 335.3 million). Since a substantial amount of investments should be made by power suppliers to prevent power outages in the residential sector, this value may be accepted as the upper limit of the benefits ensuing from those investments.
Keywords: rolling blackout; power outage; willingness to pay; residential consumer; contingent valuation (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:11:y:2019:i:5:p:1258-:d:209472
Access Statistics for this article
Sustainability is currently edited by Prof. Dr. Marc A. Rosen
More articles in Sustainability from MDPI, Open Access Journal
Bibliographic data for series maintained by XML Conversion Team ().