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Are Consumers Willing to Pay More for Electricity from Cooperatives? Results from an Online Choice Experiment in Germany

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  • Sagebiel, Julian
  • Müller, Jakob R.
  • Rommel, Jens

Abstract

With liberalization in 1998, numerous firms have entered the German retail electricity market, including newly formed cooperatives. Based on Transaction Cost Economics, we develop a theoretical framework seeking to explain preferences for electricity supplied by cooperatives from a consumer perspective. Drawing on a convenience sample of 287 German electricity consumers and Choice Experiment data from an online survey, we estimate Willingness-to-Pay values for organizational attributes of electricity suppliers, while accounting for observed and unobserved heterogeneity. Consumers in the sample exhibit a large Willingness-to-Pay for renewable energy. Our results also indicate a substantial Willingness-to-Pay for transparent pricing, participation in decision making, and local suppliers. Democratic decision making – a distinct feature of cooperatives – exhibits positive Willingness-to-Pay values for approximately one fifth of the sample. Taken together, our findings suggest a slightly higher Willingness-to-Pay for electricity produced by cooperatives. Limitations of applied sampling and other important aspects of energy transition are also discussed.

Suggested Citation

  • Sagebiel, Julian & Müller, Jakob R. & Rommel, Jens, 2013. "Are Consumers Willing to Pay More for Electricity from Cooperatives? Results from an Online Choice Experiment in Germany," MPRA Paper 52385, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:52385
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    2. Brummer, Vasco, 2018. "Community energy – benefits and barriers: A comparative literature review of Community Energy in the UK, Germany and the USA, the benefits it provides for society and the barriers it faces," Renewable and Sustainable Energy Reviews, Elsevier, vol. 94(C), pages 187-196.
    3. Rommel, Jens & Sagebiel, Julian & Müller, Jakob R., 2016. "Quality uncertainty and the market for renewable energy: Evidence from German consumers," Renewable Energy, Elsevier, vol. 94(C), pages 106-113.
    4. Sovacool, Benjamin K., 2016. "Differing cultures of energy security: An international comparison of public perceptions," Renewable and Sustainable Energy Reviews, Elsevier, vol. 55(C), pages 811-822.
    5. Langer, Katharina & Decker, Thomas & Menrad, Klaus, 2017. "Public participation in wind energy projects located in Germany: Which form of participation is the key to acceptance?," Renewable Energy, Elsevier, vol. 112(C), pages 63-73.
    6. Masako Numata & Masahiro Sugiyama & Wunna Swe & Daniel del Barrio Alvarez, 2021. "Willingness to Pay for Renewable Energy in Myanmar: Energy Source Preference," Energies, MDPI, vol. 14(5), pages 1-17, March.
    7. Moritz Ehrtmann & Lars Holstenkamp & Timon Becker, 2021. "Regional Electricity Models for Community Energy in Germany: The Role of Governance Structures," Sustainability, MDPI, vol. 13(4), pages 1-24, February.
    8. Chiara Candelise & Gianluca Ruggieri, 2020. "Status and Evolution of the Community Energy Sector in Italy," Energies, MDPI, vol. 13(8), pages 1-22, April.
    9. Kalkbrenner, Bernhard J., 2019. "Residential vs. community battery storage systems – Consumer preferences in Germany," Energy Policy, Elsevier, vol. 129(C), pages 1355-1363.
    10. Lienhoop, Nele, 2018. "Acceptance of wind energy and the role of financial and procedural participation: An investigation with focus groups and choice experiments," Energy Policy, Elsevier, vol. 118(C), pages 97-105.

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    More about this item

    Keywords

    Choice Experiments; Cooperatives; Energy Transition;
    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
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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