IDEAS home Printed from https://ideas.repec.org/a/eee/eneeco/v33y2011i6p1111-1118.html
   My bibliography  Save this article

Random preferences towards bioenergy environmental externalities: A case study of woody biomass based electricity in the Southern United States

Author

Listed:
  • Susaeta, Andres
  • Lal, Pankaj
  • Alavalapati, Janaki
  • Mercer, Evan

Abstract

This paper contrasts alternate methodological approaches of investigating public preferences, the random parameter logit (RPL) where tastes and preferences of respondents are assumed to be heterogeneous and the conditional logit (CL) approach where tastes and preferences remain fixed for individuals. We conducted a choice experiment to assess preferences for woody biomass based electricity in Arkansas, Florida, and Virginia. Reduction of CO2 emissions and improvement of forest habitat by decreasing risk of wildfires and pest outbreaks were presented to respondents as attributes of using green electricity. The results indicate that heterogeneous preferences might be a better fit for assessing preferences for green electricity. All levels of both attributes were positive contributors to welfare but they were no statistically significant. Respondents expressed a positive mean marginal willingness to pay (WTP) for each attribute level. The total WTP for green electricity per kilowatt hour was $0.049kWh or $40.5 per capita year−1 when converted into future total annual expenditures.

Suggested Citation

  • Susaeta, Andres & Lal, Pankaj & Alavalapati, Janaki & Mercer, Evan, 2011. "Random preferences towards bioenergy environmental externalities: A case study of woody biomass based electricity in the Southern United States," Energy Economics, Elsevier, vol. 33(6), pages 1111-1118.
    • Handle: RePEc:eee:eneeco:v:33:y:2011:i:6:p:1111-1118
    DOI: 10.1016/j.eneco.2011.05.015
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0140988311001204
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eneco.2011.05.015?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    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. repec:bla:jecsur:v:15:y:2001:i:3:p:435-62 is not listed on IDEAS
    2. Arne Risa Hole, 2007. "A comparison of approaches to estimating confidence intervals for willingness to pay measures," Health Economics, John Wiley & Sons, Ltd., vol. 16(8), pages 827-840, August.
    3. Caussade, Sebastián & Ortúzar, Juan de Dios & Rizzi, Luis I. & Hensher, David A., 2005. "Assessing the influence of design dimensions on stated choice experiment estimates," Transportation Research Part B: Methodological, Elsevier, vol. 39(7), pages 621-640, August.
    4. William S. Breffle & Robert D. Rowe, 2002. "Comparing Choice Question Formats for Evaluating Natural Resource Tradeoffs," Land Economics, University of Wisconsin Press, vol. 78(2), pages 298-314.
    5. Richard Carson & Theodore Groves, 2007. "Incentive and informational properties of preference questions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 37(1), pages 181-210, May.
    6. Borchers, Allison M. & Duke, Joshua M. & Parsons, George R., 2007. "Does willingness to pay for green energy differ by source?," Energy Policy, Elsevier, vol. 35(6), pages 3327-3334, June.
    7. Kataria, Mitesh, 2009. "Willingness to pay for environmental improvements in hydropower regulated rivers," Energy Economics, Elsevier, vol. 31(1), pages 69-76, January.
    8. Wiktor Adamowicz & Peter Boxall & Michael Williams & Jordan Louviere, 1998. "Stated Preference Approaches for Measuring Passive Use Values: Choice Experiments and Contingent Valuation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(1), pages 64-75.
    9. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521766555, January.
    10. W. Michael Hanemann, 1984. "Welfare Evaluations in Contingent Valuation Experiments with Discrete Responses," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 66(3), pages 332-341.
    11. Boxall, Peter C. & Adamowicz, Wiktor L. & Swait, Joffre & Williams, Michael & Louviere, Jordan, 1996. "A comparison of stated preference methods for environmental valuation," Ecological Economics, Elsevier, vol. 18(3), pages 243-253, September.
    12. Mendelsohn, Robert & Dinar, Ariel & Williams, Larry, 2006. "The distributional impact of climate change on rich and poor countries," Environment and Development Economics, Cambridge University Press, vol. 11(2), pages 159-178, April.
    13. Roe, Brian & Teisl, Mario F. & Levy, Alan & Russell, Matthew, 2001. "US consumers' willingness to pay for green electricity," Energy Policy, Elsevier, vol. 29(11), pages 917-925, September.
    14. Laura O. Taylor & Ronald G. Cummings, 1999. "Unbiased Value Estimates for Environmental Goods: A Cheap Talk Design for the Contingent Valuation Method," American Economic Review, American Economic Association, vol. 89(3), pages 649-665, June.
    15. Nick Hanley & Susana Mourato & Robert E. Wright, 2001. "Choice Modelling Approaches: A Superior Alternative for Environmental Valuatioin?," Journal of Economic Surveys, Wiley Blackwell, vol. 15(3), pages 435-462, July.
    16. Carlsson, Fredrik & Frykblom, Peter & Johan Lagerkvist, Carl, 2005. "Using cheap talk as a test of validity in choice experiments," Economics Letters, Elsevier, vol. 89(2), pages 147-152, November.
    17. Prins, Mark J. & Ptasinski, Krzysztof J. & Janssen, Frans J.J.G., 2006. "More efficient biomass gasification via torrefaction," Energy, Elsevier, vol. 31(15), pages 3458-3470.
    18. Bergmann, Ariel & Hanley, Nick & Wright, Robert, 2006. "Valuing the attributes of renewable energy investments," Energy Policy, Elsevier, vol. 34(9), pages 1004-1014, June.
    19. Fredrik Carlsson & Peter Frykblom & Carl Johan Lagerkvist, 2007. "Consumer willingness to pay for farm animal welfare: mobile abattoirs versus transportation to slaughter," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 34(3), pages 321-344, September.
    20. Marta-Pedroso, Cristina & Freitas, Helena & Domingos, Tiago, 2007. "Testing for the survey mode effect on contingent valuation data quality: A case study of web based versus in-person interviews," Ecological Economics, Elsevier, vol. 62(3-4), pages 388-398, May.
    21. Shrestha, Ram K. & Alavalapati, Janaki R. R., 2004. "Valuing environmental benefits of silvopasture practice: a case study of the Lake Okeechobee watershed in Florida," Ecological Economics, Elsevier, vol. 49(3), pages 349-359, July.
    22. Gan, Lin & Eskeland, Gunnar S. & Kolshus, Hans H., 2007. "Green electricity market development: Lessons from Europe and the US," Energy Policy, Elsevier, vol. 35(1), pages 144-155, January.
    23. Gan, Jianbang, 2007. "Supply of biomass, bioenergy, and carbon mitigation: Method and application," Energy Policy, Elsevier, vol. 35(12), pages 6003-6009, December.
    24. Li, Hui & Jenkins-Smith, Hank C. & Silva, Carol L. & Berrens, Robert P. & Herron, Kerry G., 2009. "Public support for reducing US reliance on fossil fuels: Investigating household willingness-to-pay for energy research and development," Ecological Economics, Elsevier, vol. 68(3), pages 731-742, January.
    25. Rolfe, John & Bennett, Jeff, 2009. "The impact of offering two versus three alternatives in choice modelling experiments," Ecological Economics, Elsevier, vol. 68(4), pages 1140-1148, February.
    26. Bruce McCarl & Darius Adams & Ralph Alig & John Chmelik, 2000. "Competitiveness of biomass‐fueled electrical power plants," Annals of Operations Research, Springer, vol. 94(1), pages 37-55, January.
    27. 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.
    28. Carlsson, Fredrik & Frykblom, Peter & Liljenstolpe, Carolina, 2003. "Valuing wetland attributes: an application of choice experiments," Ecological Economics, Elsevier, vol. 47(1), pages 95-103, 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. 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).
    2. Robert J. Johnston & Kevin J. Boyle & Wiktor (Vic) Adamowicz & Jeff Bennett & Roy Brouwer & Trudy Ann Cameron & W. Michael Hanemann & Nick Hanley & Mandy Ryan & Riccardo Scarpa & Roger Tourangeau & Ch, 2017. "Contemporary Guidance for Stated Preference Studies," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 4(2), pages 319-405.
    3. Ladenburg, Jacob & Olsen, Søren Bøye, 2014. "Augmenting short Cheap Talk scripts with a repeated Opt-Out Reminder in Choice Experiment surveys," Resource and Energy Economics, Elsevier, vol. 37(C), pages 39-63.
    4. Soon, Jan-Jan & Ahmad, Siti-Aznor, 2015. "Willingly or grudgingly? A meta-analysis on the willingness-to-pay for renewable energy use," Renewable and Sustainable Energy Reviews, Elsevier, vol. 44(C), pages 877-887.
    5. 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.
    6. Aravena, Claudia & Hutchinson, W. George & Longo, Alberto, 2012. "Environmental pricing of externalities from different sources of electricity generation in Chile," Energy Economics, Elsevier, vol. 34(4), pages 1214-1225.
    7. Chaikaew, Pasicha & Hodges, Alan W. & Grunwald, Sabine, 2017. "Estimating the value of ecosystem services in a mixed-use watershed: A choice experiment approach," Ecosystem Services, Elsevier, vol. 23(C), pages 228-237.
    8. Aude Ridier & Caroline Roussy & Karim Chaib, 2021. "Adoption of crop diversification by specialized grain farmers in south-western France: evidence from a choice-modelling experiment," Review of Agricultural, Food and Environmental Studies, Springer, vol. 102(3), pages 265-283, September.
    9. Campbell, Robert M. & Venn, Tyron J. & Anderson, Nathaniel M., 2016. "Social preferences toward energy generation with woody biomass from public forests in Montana, USA," Forest Policy and Economics, Elsevier, vol. 73(C), pages 58-67.
    10. Johanna Lena Dahlhausen & Cam Rungie & Jutta Roosen, 2018. "Value of labeling credence attributes—common structures and individual preferences," Agricultural Economics, International Association of Agricultural Economists, vol. 49(6), pages 741-751, November.
    11. Broberg, Thomas & Daniel, Aemiro Melkamu & Persson, Lars, 2021. "Household preferences for load restrictions: Is there an effect of pro-environmental framing?," Energy Economics, Elsevier, vol. 97(C).
    12. Anders Dugstad & Kristine Grimsrud & Gorm Kipperberg & Henrik Lindhjem & Ståle Navrud, 2020. "Scope elasticity and economic significance in discrete choice experiments," Discussion Papers 942, Statistics Norway, Research Department.
    13. Rabotyagov, Sergey S. & Lin, Sonja, 2013. "Small forest landowner preferences for working forest conservation contract attributes: A case of Washington State, USA," Journal of Forest Economics, Elsevier, vol. 19(3), pages 307-330.
    14. Aguilar, Francisco X. & Cai, Zhen & Mohebalian, Phillip & Thompson, Wyatt, 2015. "Exploring the drivers' side of the “blend wall”: U.S. consumer preferences for ethanol blend fuels," Energy Economics, Elsevier, vol. 49(C), pages 217-226.
    15. Campbell, Robert & Venn, Tyron & Anderson, Nathaniel, 2015. "Quantifying Social Preferences toward Woody Biomass Energy Generation in Montana, USA," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205678, Agricultural and Applied Economics Association.
    16. Halkos, George & Galani, Georgia, 2016. "Assessing willingness to pay for marine and coastal ecosystems: A Case Study in Greece," MPRA Paper 68767, University Library of Munich, Germany.
    17. Alló, Maria & Loureiro, Maria L., 2014. "The role of social norms on preferences towards climate change policies: A meta-analysis," Energy Policy, Elsevier, vol. 73(C), pages 563-574.
    18. Mat Alipiah, Roseliza & Anang, Zuraini & Abdul Rashid, Noorhaslinda Kulub & Smart, James C. R. & Wan Ibrahim, Wan Noorwatie, 2018. "Aquaculturists Preference Heterogeneity towards Wetland Ecosystem Services: A Latent Class Discrete Choice Model," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 52(2), pages 253-266.
    19. Uz, Dilek & Mamkhezri, Jamal, 2024. "Household willingness to pay for various attributes of residential solar panels: Evidence from a discrete choice experiment," Energy Economics, Elsevier, vol. 130(C).
    20. Jin, Jianjun & He, Rui & Wang, Wenyu & Gong, Haozhou, 2018. "Valuing cultivated land protection: A contingent valuation and choice experiment study in China," Land Use Policy, Elsevier, vol. 74(C), pages 214-219.

    More about this item

    Keywords

    Choice experiment; Willingness to pay; Woody biomass; Electricity;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

    Statistics

    Access and download statistics

    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:eneeco:v:33:y:2011:i:6:p:1111-1118. 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/eneco .

    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.