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Measuring Renewable Energy Externalities: Evidence from Subjective Well-Being Data

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  • Charlotte von Möllendorff
  • Heinz Welsch

Abstract

Electricity from renewable sources avoids disadvantages of conventional power generation but often meets with local resistance due to visual, acoustic, and odor nuisance. We use representative panel data on the subjective well-being of 46,678 individuals in Germany, 1994-2012, for identifying and valuing the local externalities from solar, wind and biomass plants in respondents’ postcode area and adjacent postcode areas. We find significant well-being externalities of all three technologies that differ with regard to their temporal and spatial characteristics. The monetary equivalent of 1 MW capacity expansion is estimated to be in the range of 0.3-0.7 percent of per capita income.

Suggested Citation

  • Charlotte von Möllendorff & Heinz Welsch, 2015. "Measuring Renewable Energy Externalities: Evidence from Subjective Well-Being Data," SOEPpapers on Multidisciplinary Panel Data Research 779, DIW Berlin, The German Socio-Economic Panel (SOEP).
    • Handle: RePEc:diw:diwsop:diw_sp779
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    More about this item

    Keywords

    renewable energy; local externality; subjective well-being; life satisfaction; non-market valuation;
    All these keywords.

    JEL classification:

    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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