IDEAS home Printed from https://ideas.repec.org/a/eee/ecolec/v70y2011i11p2191-2200.html
   My bibliography  Save this article

Do environmental benefits matter? Evidence from a choice experiment among house owners in Germany

Author

Listed:
  • Achtnicht, Martin

Abstract

Residential buildings strongly contribute to global CO2 emissions due to the high energy demand for electricity and heating, particularly in industrialised countries. Within the EU, decentralised heat generation is of particular relevance for future climate policy, as its emissions are not covered by the EU ETS. We conducted a choice experiment concerning energy retrofits for existing houses in Germany. In the experiment, the approximately 400 sampled house owners could either choose a modern heating system or an improved thermal insulation for their home. We used standard and mixed logit specifications to analyse the choice data. We found environmental benefits to have a significant impact on choices of heating systems. However, they played no role in terms of insulation choices. Based on the estimated mixed logit model, we further obtained willingness-to-pay (WTP) measures for CO2 savings.

Suggested Citation

  • Achtnicht, Martin, 2011. "Do environmental benefits matter? Evidence from a choice experiment among house owners in Germany," Ecological Economics, Elsevier, vol. 70(11), pages 2191-2200, September.
    • Handle: RePEc:eee:ecolec:v:70:y:2011:i:11:p:2191-2200
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0921800911002734
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Linden, Anna-Lisa & Carlsson-Kanyama, Annika & Eriksson, Bjorn, 2006. "Efficient and inefficient aspects of residential energy behaviour: What are the policy instruments for change?," Energy Policy, Elsevier, vol. 34(14), pages 1918-1927, September.
    2. Revelt, David & Train, Kenneth, 2000. "Customer-Specific Taste Parameters and Mixed Logit: Households' Choice of Electricity Supplier," Department of Economics, Working Paper Series qt1900p96t, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    3. Alistair Munro, 2009. "Introduction to the Special Issue: Things We Do and Don’t Understand About the Household and the Environment," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 43(1), pages 1-10, May.
    4. James Murphy & P. Allen & Thomas Stevens & Darryl Weatherhead, 2005. "A Meta-analysis of Hypothetical Bias in Stated Preference Valuation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 30(3), pages 313-325, March.
    5. Brownstone, David & Train, Kenneth, 1998. "Forecasting new product penetration with flexible substitution patterns," Journal of Econometrics, Elsevier, vol. 89(1-2), pages 109-129, November.
    6. Arthur, W Brian, 1989. "Competing Technologies, Increasing Returns, and Lock-In by Historical Events," Economic Journal, Royal Economic Society, vol. 99(394), pages 116-131, March.
    7. Sorrell, Steve & Dimitropoulos, John, 2008. "The rebound effect: Microeconomic definitions, limitations and extensions," Ecological Economics, Elsevier, vol. 65(3), pages 636-649, April.
    8. Andrew A. Goett & Kathleen Hudson & Kenneth E. Train, 2000. "Customers' Choice Among Retail Energy Suppliers: The Willingness-to-Pay for Service Attributes," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 1-28.
    9. Fredrik Carlsson & Peter Martinsson, 2008. "How Much is Too Much?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 40(2), pages 165-176, June.
    10. Martin Achtnicht, 2012. "German car buyers’ willingness to pay to reduce CO 2 emissions," Climatic Change, Springer, vol. 113(3), pages 679-697, August.
    11. Peter Grosche & Colin Vance, 2009. "Willingness to Pay for Energy Conservation and Free-Ridership on Subsidization: Evidence from Germany," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 135-154.
    12. Louviere,Jordan J. & Hensher,David A. & Swait,Joffre D. With contributions by-Name:Adamowicz,Wiktor, 2000. "Stated Choice Methods," Cambridge Books, Cambridge University Press, number 9780521788304, November.
    13. Daniel Kahneman, 2003. "A Psychological Perspective on Economics," American Economic Review, American Economic Association, vol. 93(2), pages 162-168, May.
    14. David, Paul A, 1985. "Clio and the Economics of QWERTY," American Economic Review, American Economic Association, vol. 75(2), pages 332-337, May.
    15. Banfi, Silvia & Farsi, Mehdi & Filippini, Massimo & Jakob, Martin, 2008. "Willingness to pay for energy-saving measures in residential buildings," Energy Economics, Elsevier, vol. 30(2), pages 503-516, March.
    16. Poortinga, Wouter & Steg, Linda & Vlek, Charles & Wiersma, Gerwin, 2003. "Household preferences for energy-saving measures: A conjoint analysis," Journal of Economic Psychology, Elsevier, vol. 24(1), pages 49-64, February.
    17. Martin Jakob, 2007. "The drivers of and barriers to energy efficiency in renovation decisions of single-family home-owners," CEPE Working paper series 07-56, CEPE Center for Energy Policy and Economics, ETH Zurich.
    18. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    19. Ek, Kristina & Söderholm, Patrik, 2010. "The devil is in the details: Household electricity saving behavior and the role of information," Energy Policy, Elsevier, vol. 38(3), pages 1578-1587, March.
    20. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521747387, November.
    21. David Hensher & William Greene, 2003. "The Mixed Logit model: The state of practice," Transportation, Springer, vol. 30(2), pages 133-176, May.
    22. Kwak, So-Yoon & Yoo, Seung-Hoon & Kwak, Seung-Jun, 2010. "Valuing energy-saving measures in residential buildings: A choice experiment study," Energy Policy, Elsevier, vol. 38(1), pages 673-677, January.
    23. Hoyos, David, 2010. "The state of the art of environmental valuation with discrete choice experiments," Ecological Economics, Elsevier, vol. 69(8), pages 1595-1603, June.
    24. David Revelt & Kenneth Train, 1998. "Mixed Logit With Repeated Choices: Households' Choices Of Appliance Efficiency Level," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 647-657, November.
    25. Arne Risa Hole, 2007. "Fitting mixed logit models by using maximum simulated likelihood," Stata Journal, StataCorp LP, vol. 7(3), pages 388-401, September.
    26. Daniel Kahneman & Jack L. Knetsch & Richard H. Thaler, 1991. "Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 193-206, Winter.
    27. Brownstone, David & Bunch, David S & Golob, Thomas F & Ren, Weiping, 1996. "A Transactions Choice Model for Forecasting Demand for Alternative-Fuel Vehicles," University of California Transportation Center, Working Papers qt3sm7w9zk, University of California Transportation Center.
    28. Berrens, Robert P. & Bohara, Alok K. & Jenkins-Smith, Hank C. & Silva, Carol L. & Weimer, David L., 2004. "Information and effort in contingent valuation surveys: application to global climate change using national internet samples," Journal of Environmental Economics and Management, Elsevier, vol. 47(2), pages 331-363, March.
    29. Araña, Jorge E. & León, Carmelo J., 2009. "Understanding the use of non-compensatory decision rules in discrete choice experiments: The role of emotions," Ecological Economics, Elsevier, vol. 68(8-9), pages 2316-2326, June.
    30. Hanley, Nick & Adamowicz, Wiktor & Wright, Robert E., 2005. "Price vector effects in choice experiments: an empirical test," Resource and Energy Economics, Elsevier, vol. 27(3), pages 227-234, October.
    31. Solomon, Barry D. & Johnson, Nicholas H., 2009. "Valuing climate protection through willingness to pay for biomass ethanol," Ecological Economics, Elsevier, vol. 68(7), pages 2137-2144, May.
    32. MacKerron, George J. & Egerton, Catrin & Gaskell, Christopher & Parpia, Aimie & Mourato, Susana, 2009. "Willingness to pay for carbon offset certification and co-benefits among (high-)flying young adults in the UK," Energy Policy, Elsevier, vol. 37(4), pages 1372-1381, April.
    33. Andersen, Steffen & Harrison, Glenn W. & Hole, Arne Risa & Rutström, Elisabet E., 2009. "Non-Linear Mixed Logit and the Characterization of Individual Heterogeneity," Working Papers 06-2009, Copenhagen Business School, Department of Economics.
    34. Hensher, David A. & Stopher, Peter R. & Louviere, Jordan J., 2001. "An exploratory analysis of the effect of numbers of choice sets in designed choice experiments: an airline choice application," Journal of Air Transport Management, Elsevier, vol. 7(6), pages 373-379.
    35. Howarth, Richard B. & Andersson, Bo, 1993. "Market barriers to energy efficiency," Energy Economics, Elsevier, vol. 15(4), pages 262-272, October.
    36. J. Scott Long & Jeremy Freese, 2006. "Regression Models for Categorical Dependent Variables using Stata, 2nd Edition," Stata Press books, StataCorp LLC, edition 2, number long2, August.
    37. Sardianou, Eleni, 2007. "Estimating energy conservation patterns of Greek households," Energy Policy, Elsevier, vol. 35(7), pages 3778-3791, July.
    38. Venkatachalam, L., 2008. "Behavioral economics for environmental policy," Ecological Economics, Elsevier, vol. 67(4), pages 640-645, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Martin Achtnicht, 2012. "German car buyers’ willingness to pay to reduce CO 2 emissions," Climatic Change, Springer, vol. 113(3), pages 679-697, August.
    2. Achtnicht, Martin & Madlener, Reinhard, 2014. "Factors influencing German house owners' preferences on energy retrofits," Energy Policy, Elsevier, vol. 68(C), pages 254-263.
    3. Galassi, Veronica & Madlener, Reinhard, 2017. "The Role of Environmental Concern and Comfort Expectations in Energy Retrofit Decisions," Ecological Economics, Elsevier, vol. 141(C), pages 53-65.
    4. Haghani, Milad & Bliemer, Michiel C.J. & Hensher, David A., 2021. "The landscape of econometric discrete choice modelling research," Journal of choice modelling, Elsevier, vol. 40(C).
    5. Galassi, Veronica & Madlener, Reinhard, 2016. "Some Like it Hot: The Role of Environmental Concern and Comfort Expectations in Energy Retrofit Decisions," FCN Working Papers 11/2016, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    6. Amador, Francisco Javier & González, Rosa Marina & Ramos-Real, Francisco Javier, 2013. "Supplier choice and WTP for electricity attributes in an emerging market: The role of perceived past experience, environmental concern and energy saving behavior," Energy Economics, Elsevier, vol. 40(C), pages 953-966.
    7. Christian A. Oberst & Reinhard Madlener, 2015. "Prosumer Preferences Regarding the Adoption of Micro†Generation Technologies: Empirical Evidence for German Homeowners," Working Papers 2015.07, International Network for Economic Research - INFER.
    8. Schueftan, Alejandra & Aravena, Claudia & Reyes, René, 2021. "Financing energy efficiency retrofits in Chilean households: The role of financial instruments, savings and uncertainty in energy transition," Resource and Energy Economics, Elsevier, vol. 66(C).
    9. Dalia Streimikiene & Tomas Balezentis & Ilona Alisauskaite-Seskiene & Gintare Stankuniene & Zaneta Simanaviciene, 2019. "A Review of Willingness to Pay Studies for Climate Change Mitigation in the Energy Sector," Energies, MDPI, vol. 12(8), pages 1-38, April.
    10. Imran Khan & Hongdou Lei & Gaffar Ali & Shahid Ali & Minjuan Zhao, 2019. "Public Attitudes, Preferences and Willingness to Pay for River Ecosystem Services," IJERPH, MDPI, vol. 16(19), pages 1-17, October.
    11. Aravena, Claudia & Martinsson, Peter & Scarpa, Riccardo, 2014. "Does money talk? — The effect of a monetary attribute on the marginal values in a choice experiment," Energy Economics, Elsevier, vol. 44(C), pages 483-491.
    12. Hoyos, David, 2010. "The state of the art of environmental valuation with discrete choice experiments," Ecological Economics, Elsevier, vol. 69(8), pages 1595-1603, June.
    13. Daziano, Ricardo A. & Achtnicht, Martin, 2014. "Accounting for uncertainty in willingness to pay for environmental benefits," Energy Economics, Elsevier, vol. 44(C), pages 166-177.
    14. Gutsche, Gunnar & Ziegler, Andreas, 2019. "Which private investors are willing to pay for sustainable investments? Empirical evidence from stated choice experiments," Journal of Banking & Finance, Elsevier, vol. 102(C), pages 193-214.
    15. Miller, Sini & Tait, Peter & Saunders, Caroline, 2015. "Estimating indigenous cultural values of freshwater: A choice experiment approach to Māori values in New Zealand," Ecological Economics, Elsevier, vol. 118(C), pages 207-214.
    16. Gunnar Gutsche & Andreas Ziegler, 2016. "Are private investors willing to pay for sustainable investments? A stated choice experiment," MAGKS Papers on Economics 201640, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    17. Lea Skræp Svenningsen, 2017. "Distributive outcomes matter: Measuring social preferences for climate policy," IFRO Working Paper 2017/11, University of Copenhagen, Department of Food and Resource Economics.
    18. Lang, Ghislaine & Farsi, Mehdi & Lanz, Bruno & Weber, Sylvain, 2021. "Energy efficiency and heating technology investments: Manipulating financial information in a discrete choice experiment," Resource and Energy Economics, Elsevier, vol. 64(C).
    19. Ajayi, V. & Reiner, D., 2020. "Consumer Willingness to Pay for Reducing the Environmental Footprint of Green Plastics," Cambridge Working Papers in Economics 20110, Faculty of Economics, University of Cambridge.
    20. repec:ehu:biltok:5571 is not listed on IDEAS

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolec:v:70:y:2011:i:11:p:2191-2200. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolecon .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.