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Hypothetical Market Familiarity and the Disconnect Between Stated and Observed Values for Green Energy

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  • Charles Sims

    (Department of Applied Economics, Utah State University, USA)

Abstract

Participation rates and utility premiums for green power programs are generally less than implied by contingent valuation studies. This study compares open-ended and dichotomouschoice responses with actual participation rates of a green power program to examine the effect of hypothetical market familiarity. Traditionally, respondents are asked to value a renewable energy block which represents a quality improvement in a percentage of a good. When placed in a more familiar market setting, stated values are more closely aligned with premiums currently charged. Participation rates remain exaggerated indicating responses are viewed as a vote in favor of or against cleaner energy sources.

Suggested Citation

  • Charles Sims, 2013. "Hypothetical Market Familiarity and the Disconnect Between Stated and Observed Values for Green Energy," International Journal of Energy Economics and Policy, Econjournals, vol. 3(1), pages 10-19.
    • Handle: RePEc:eco:journ2:2013-01-2
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    References listed on IDEAS

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    Cited by:

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    More about this item

    Keywords

    Contingent valuation; green energy programs; renewable energy blocks; scope effects; coal-fired power plants; single-bounded dichotomous choice;
    All these keywords.

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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