The Impact of Location and Proximity on Consumers’ Willingness to Pay for Renewable and Alternative Electricity: The Case of West Virginia

Kofi Nkansah and Alan Collins

No 175698, 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota from Agricultural and Applied Economics Association

Abstract: In 2015, West Virginia will implement a Renewable and Alternative Energy Portfolio Standards Act. Meeting these standards with either natural gas or wind power will generate different welfare impacts across society. In particular, this study examined how energy source and generation proximity influence consumers’ willingness-to-pay (WTP) for electricity. Using choice modelling, residents within two counties with distinct location characteristics (existing coal power plant or wind farm) were asked to choose between a renewable source (wind farm) and an alternative energy source (natural gas power plant). We also seek to determine how residents’ proximity to a hypothetical electricity generation facility (wind farm or natural gas generation source) influences their WTP for renewable and alternative electricity. Results showed that the sampled population in both counties were willing to pay a much higher positive premium to site a natural gas-fired power plant at a distances far from their residence compared to siting wind turbines at a similar distance. Compensation was required to site a natural gas-fired power plant at a moderate distance from an individuals’ residence.

Keywords: Consumer/Household Economics; Demand and Price Analysis; Environmental Economics and Policy; Institutional and Behavioral Economics; Resource /Energy Economics and Policy (search for similar items in EconPapers)
Pages: 2
Date: 2014
New Economics Papers: this item is included in nep-dcm, nep-ene, nep-env and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea14:175698

DOI: 10.22004/ag.econ.175698

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