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Consumers’ Willingness to Pay for Renewable Energy: A Meta-Regression Analysis

Chunbo Ma (), Abbie Rogers (), Marit Kragt, Fan Zhang, Maksym Polyakov (), Fiona Gibson, Morteza Chalak, Ram Pandit and Sorada Tapsuwan

No 204197, Working Papers from University of Western Australia, School of Agricultural and Resource Economics

Abstract: Using renewable energy for domestic consumption has been identified as a key strategy by the Intergovernmental Panel on Climate Change to reduce greenhouse gas emissions. Critical to the success of this strategy is to know whether consumers are willing to pay to increase the proportion of electricity generated from renewable energy in their electricity portfolio. There are a number of studies in the literature that report a wide range of willingness to pay estimates. In this study, we used a meta-regression analysis to determine how much of the variation in willingness to pay reflects true differences across the population and how much is due to study design, such as survey design and administration, and model specification. The results showed that factors that influence willingness to pay in individual studies, such as renewable energy type, consumers’ socio-economic profile and consumers’ energy consumption patterns, explain less variation in willingness to pay estimates than the characteristics of the study design. We also found that consumers have significantly higher willingness to pay for electricity generated from solar or generic renewable energy source (i.e. not a specific source) than wind, hydro or biomass. Due to the effect of study design on willingness to pay, we recommend that policy makers exercise caution when interpreting and using willingness to pay results from primary studies.

Keywords: Environmental Economics and Policy; Institutional and Behavioral Economics; Resource /Energy Economics and Policy (search for similar items in EconPapers)
Pages: 29
Date: 2015-06-05
New Economics Papers: this item is included in nep-dcm, nep-ene and nep-env
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DOI: 10.22004/ag.econ.204197

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