The Effect of Power Outages and Cheap Talk on Willingness to Pay to Reduce Outages

Fredrik Carlsson, Peter Martinsson and Alpaslan Akay

No 4307, IZA Discussion Papers from IZA Network @ LISER

Abstract: Using an open-ended contingent valuation survey, we analyze how (i) experience of a power outage due to one of the worst storms ever to hit Sweden and (ii) a cheap talk script affect respondents' WTP to avoid power outages. Experience significantly increases and a cheap talk script decreases the proportion of respondents with zero WTP. There is no significant effect in either case on stated WTP conditional on a positive WTP. The paper concludes with a discussion on the use of valuation studies shortly after the occurrence of an undesirable event.

Keywords: experience; power outages; contingent valuation; cheap talk (search for similar items in EconPapers)
JEL-codes: C25 D12 Q41 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2009-07
New Economics Papers: this item is included in nep-ene, nep-env and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Published - revised version published in: Energy Economics, 2011, 33 (5), 790 - 798

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Related works:
Journal Article: The effect of power outages and cheap talk on willingness to pay to reduce outages (2011)
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