IDEAS home Printed from https://ideas.repec.org/a/ukm/jlekon/v52y2018i3p143-151.html
   My bibliography  Save this article

Willingness to Pay for Renewable Energy: Evidence from Malaysian’s Households

Author

Listed:
  • Azlina, A.A.

    (School of Social and Economic Development Universiti Malaysia Terengganu 21030 Kuala Nerus Terengganu MALAYSIA)

  • Kamaludin, Mahirah

    (School of Social and Economic Development Universiti Malaysia Terengganu 21030 Kuala Nerus, Terengganu MALAYSIA)

  • Sin, Moe Shwe

    (School of Social and Economic Development Universiti Malaysia Terengganu 21030 Kuala Nerus, Terengganu MALAYSIA)

Abstract

The growing consumption of fossil energy fuels that is linked with climate change and quality of life has pushed renewable energy development into the centre of debate on energy security. Renewable energy has become a top priority for the governments in most countries due to its distinctive features of a cleaner energy source. Despite Malaysia’s effort to encourage the various forms of renewable energy (RE), the total amount of RE is still very low. Moreover, difficulties arise as the energy supply is highly related to the general wellbeing of the individuals and societies. As such, exploring the consumer’s willingness for RE has become vital as this new knowledge can be used by the government to promote long run RE consumption. This study attempts to investigate consumers’WTP for RE sources and discover other factors of WTP with special attention to Malaysia setting. By employing a contingent valuation method (CVM), the findings reveal that the willingness to pay (WTP) for RE is significantly related to the proposed bid price and household income. The results also indicate that consumer on average is willing to pay about RM3.22 (USD0.82) per month for the Renewable Energy Fund. This micro-level investigation can be a useful framework in organising information on how consumers are willing to contribute towards the development of RE in Malaysia.

Suggested Citation

  • Azlina, A.A. & Kamaludin, Mahirah & Sin, Moe Shwe, 2018. "Willingness to Pay for Renewable Energy: Evidence from Malaysian’s Households," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 52(3), pages 143-151.
    • Handle: RePEc:ukm:jlekon:v:52:y:2018:i:3:p:143-151
    DOI: http://dx.doi.org/10.17576/JEM-2018-5203-11
    as

    Download full text from publisher

    File URL: http://www.ukm.my/jem/wp-content/uploads/2021/06/jeko_523-11.pdf
    Download Restriction: no
    File URL: https://libkey.io/http://dx.doi.org/10.17576/JEM-2018-5203-11?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
    ---><---

    References listed on IDEAS

    as
    1. Emmanuel Flachaire & Guillaume Hollard, 2006. "Controlling Starting-Point Bias in Double-Bounded Contingent Valuation Surveys," Land Economics, University of Wisconsin Press, vol. 82(1), pages 103-111.
    2. Barbara J. Kanninen & M. Sami Khawaja, 1995. "Measuring Goodness of Fit for the Double-Bounded Logit Model," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(4), pages 885-890.
    3. Chien, Yu-Lan & Huang, Cliff J. & Shaw, Daigee, 2005. "A general model of starting point bias in double-bounded dichotomous contingent valuation surveys," Journal of Environmental Economics and Management, Elsevier, vol. 50(2), pages 362-377, September.
    4. Lim, Xin-Le & Lam, Wei-Haur, 2014. "Public Acceptance of Marine Renewable Energy in Malaysia," Energy Policy, Elsevier, vol. 65(C), pages 16-26.
    5. Anna Alberini, 1995. "Testing Willingness-to-Pay Models of Discrete Choice Contingent Valuation Survey Data," Land Economics, University of Wisconsin Press, vol. 71(1), pages 83-95.
    6. Mozumder, Pallab & Vásquez, William F. & Marathe, Achla, 2011. "Consumers' preference for renewable energy in the southwest USA," Energy Economics, Elsevier, vol. 33(6), pages 1119-1126.
    7. Arega, Tiruwork & Tadesse, Tewodros, 2017. "Household willingness to pay for green electricity in urban and peri-urban Tigray, northern Ethiopia: Determinants and welfare effects," Energy Policy, Elsevier, vol. 100(C), pages 292-300.
    8. Zorić, Jelena & Hrovatin, Nevenka, 2012. "Household willingness to pay for green electricity in Slovenia," Energy Policy, Elsevier, vol. 47(C), pages 180-187.
    9. Richard Carson & Nicholas Flores & Norman Meade, 2001. "Contingent Valuation: Controversies and Evidence," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 19(2), pages 173-210, June.
    10. Oh, Tick Hui & Pang, Shen Yee & Chua, Shing Chyi, 2010. "Energy policy and alternative energy in Malaysia: Issues and challenges for sustainable growth," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(4), pages 1241-1252, May.
    11. Carson, Richard T & Flores, Nicholas A, 2000. "Contingent Valuation: Controversies and Evidence," University of California at San Diego, Economics Working Paper Series qt75k752s7, Department of Economics, UC San Diego.
    12. Michael Hanemann & John Loomis & Barbara Kanninen, 1991. "Statistical Efficiency of Double-Bounded Dichotomous Choice Contingent Valuation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(4), pages 1255-1263.
    13. Guo, Xiurui & Liu, Haifeng & Mao, Xianqiang & Jin, Jianjun & Chen, Dongsheng & Cheng, Shuiyuan, 2014. "Willingness to pay for renewable electricity: A contingent valuation study in Beijing, China," Energy Policy, Elsevier, vol. 68(C), pages 340-347.
    14. Kardooni, Roozbeh & Yusoff, Sumiani Binti & Kari, Fatimah Binti, 2016. "Renewable energy technology acceptance in Peninsular Malaysia," Energy Policy, Elsevier, vol. 88(C), pages 1-10.
    15. Andrea De Montis & Corrado Zoppi, 2009. "Contingent Valuation of renewable energy innovations: vegetal biomass in Italy," International Journal of Environmental Technology and Management, Inderscience Enterprises Ltd, vol. 11(1/2/3), pages 218-233.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Son, Woojin & Lee, Seungyeon & Woo, JongRoul, 2023. "Community acceptance of hydrogen power plant projects: The case of South Korea," Renewable and Sustainable Energy Reviews, Elsevier, vol. 187(C).
    2. Azlina, A. A. & Abu Bakar, Shahida & Kamaludin, Mahirah & Ghani, Awang Noor, 2022. "Willingness to Pay for Renewable Energy: Evidence From High Wind and Wave Energy Potential Areas," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 56(1), pages 59-70.

    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. Oerlemans, Leon A.G. & Chan, Kai-Ying & Volschenk, Jako, 2016. "Willingness to pay for green electricity: A review of the contingent valuation literature and its sources of error," Renewable and Sustainable Energy Reviews, Elsevier, vol. 66(C), pages 875-885.
    2. Azlina, A. A. & Abu Bakar, Shahida & Kamaludin, Mahirah & Ghani, Awang Noor, 2022. "Willingness to Pay for Renewable Energy: Evidence From High Wind and Wave Energy Potential Areas," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 56(1), pages 59-70.
    3. Genius, Margarita & Strazzera, Elisabetta, 2011. "Can unbiased be tighter? Assessment of methods to reduce the bias-variance trade-off in WTP estimation," Resource and Energy Economics, Elsevier, vol. 33(1), pages 293-314, January.
    4. Gebreegziabher, Z. & Mekonnen, A. & Beyene, A.D. & Hagos, F., 2018. "Valuation of access to irrigation water in rural Ethiopia: application of choice experiment and contingent valuation methods," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277168, International Association of Agricultural Economists.
    5. Saengsupavanich, Cherdvong & Seenprachawong, Udomsak & Gallardo, Wenresti G. & Shivakoti, Ganesh P., 2008. "Port-induced erosion prediction and valuation of a local recreational beach," Ecological Economics, Elsevier, vol. 67(1), pages 93-103, August.
    6. Lee, Chul-Yong & Lee, Min-Kyu & Yoo, Seung-Hoon, 2017. "Willingness to pay for replacing traditional energies with renewable energy in South Korea," Energy, Elsevier, vol. 128(C), pages 284-290.
    7. Jin, Jianjun & Wan, Xinyu & Lin, Yongsheng & Kuang, Foyuan & Ning, Jing, 2019. "Public willingness to pay for the research and development of solar energy in Beijing, China," Energy Policy, Elsevier, vol. 134(C).
    8. Kang, Heechan & Haab, Timothy C. & Interis, Matthew G., 2013. "Identifying inconsistent responses in dichotomous choice contingent valuation with follow-up questions," Resource and Energy Economics, Elsevier, vol. 35(3), pages 396-411.
    9. 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.
    10. Frédéric Salladarré & Dorothée Brécard & Sterenn Lucas & Pierrick Ollivier, 2016. "Are French consumers ready to pay a premium for eco-labeled seafood products? A contingent valuation estimation with heterogeneous anchoring," Agricultural Economics, International Association of Agricultural Economists, vol. 47(2), pages 247-258, March.
    11. Cook, David & Davíðsdóttir, Brynhildur & Kristófersson, Daði Már, 2018. "Willingness to pay for the preservation of geothermal areas in Iceland – The contingent valuation studies of Eldvörp and Hverahlíð," Renewable Energy, Elsevier, vol. 116(PA), pages 97-108.
    12. Araña, Jorge E. & León, Carmelo J., 2008. "Do emotions matter? Coherent preferences under anchoring and emotional effects," Ecological Economics, Elsevier, vol. 66(4), pages 700-711, July.
    13. Franz Hackl & Gerald J. Pruckner, 2005. "Warm glow, free‐riding and vehicle neutrality in a health‐related contingent valuation study," Health Economics, John Wiley & Sons, Ltd., vol. 14(3), pages 293-306, March.
    14. Kiprop, Jonah Kipsaat, 2015. "An Evaluation Of Farmers Willingness To Pay For Irrigation Water In Kerio Valley Basin Kenya," Research Theses 265580, Collaborative Masters Program in Agricultural and Applied Economics.
    15. Hermann Donfouet & Ephias Makaudze & Pierre-Alexandre Mahieu & Eric Malin, 2011. "The determinants of the willingness-to-pay for community-based prepayment scheme in rural Cameroon," International Journal of Health Economics and Management, Springer, vol. 11(3), pages 209-220, September.
    16. Balezentis, Tomas & Streimikiene, Dalia & Mikalauskas, Ignas & Shen, Zhiyang, 2021. "Towards carbon free economy and electricity: The puzzle of energy costs, sustainability and security based on willingness to pay," Energy, Elsevier, vol. 214(C).
    17. Taale, Francis & Kyeremeh, Christian, 2016. "Households׳ willingness to pay for reliable electricity services in Ghana," Renewable and Sustainable Energy Reviews, Elsevier, vol. 62(C), pages 280-288.
    18. Gebretsadik, Kidanemariam Abreha & Romstad, Eirik, 2020. "Climate and farmers’ willingness to pay for improved irrigation water supply," World Development Perspectives, Elsevier, vol. 20(C).
    19. Meles, Tensay Hadush, 2020. "Impact of power outages on households in developing countries: Evidence from Ethiopia," Energy Economics, Elsevier, vol. 91(C).
    20. Bigerna, Simona & Choudhary, Piyush & Kumar Jain, Nikunj & Micheli, Silvia & Polinori, Paolo, 2022. "Avoiding unanticipated power outages: households’ willingness to pay in India," MPRA Paper 114160, University Library of Munich, Germany.

    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:ukm:jlekon:v:52:y:2018:i:3:p:143-151. 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: Muhammad Asri Abd Ghani (email available below). General contact details of provider: https://edirc.repec.org/data/feukmmy.html .

    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.