An Experimental Study on the Gap between Willingness to Pay and Willingness to Donate for Green Electricity

Roland Menges and Stefan Traub ()

FinanzArchiv: Public Finance Analysis, 2009, vol. 65, issue 3, 335-357

Abstract: We experimentally investigate the gap between willingness to pay and willingness to donate in the context of the promotion of green electricity. The experiment involves two differing scenarios (public choice versus individual choice) and two distinct public payment vehicles (direct tax versus indirect tax). Our main result is that subjects´ WTP significantly exceeds WTD, by a factor of three. Regression analysis shows that our results remain robust when controlling for personal characteristics and attitudes. We conclude from our results that our subjects perceived the promotion of environmental quality as a public duty rather than an individual task.

Keywords: free-riding; green electricity; impure altruism; willingness to donate; willingness to pay (search for similar items in EconPapers)
JEL-codes: C91 H23 H41 Q42 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (15)

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DOI: 10.1628/001522108X477804

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