Determinants of willingness-to-pay for attributes of power outage - an empirical discrete choice experiment addressing implications for fuel switching in developing countries
Files
(Published version)
Date
2017
Authors
Zemo, K.H.
Kassahun, H.T.
Olsen, S.B.
Editors
Advisors
Journal Title
Journal ISSN
Volume Title
Type:
Conference paper
Citation
EAERE2017 - Annual conference of the European Association of Environmental and Resource Economists (EAERE), 2017, pp.1-34
Statement of Responsibility
Conference Name
EAERE2017 - 23rd Annual Conference of the European Association of Environmental and Resource Economists (EAERE) (28 Jun 2017 : Athens, Greece)
Abstract
In many developing countries there is a desire to switch from traditional fossil fuel to renewable energy. However, the supply of renewable energy is often characterized by a severe lack of reliability. Despite its potential consequences for successful introduction, the impact of reliability on household adoption of new environmental friendly electricity service options is not yet well understood. This paper seeks to answer if, and to what extent, power outages inhibit switching from fuel wood to hydropower based electricity supply, and factors that determine households’ willingness to pay to reduce power outages using a unique combination of mixed logit and seemingly unrelated regression models based on choice experiment data collected from urban households in Ethiopia. We find that frequency, duration, timing of power outages and advance notice are important characteristics determining whether households switch to electricity. The less reliable the electricity supply is the less likely households are to switch to it. Therefore, unreliability in electricity supply maintains the current use of fuel wood, resulting in continued environmental and health problems. Hence, policymakers should work to improve reliability to speed up the desired fuel switching process.
School/Discipline
Dissertation Note
Provenance
Description
Access Status
Rights
Copyright 2017 The Author(s)
Access Condition Notes: Accepted manuscript only available