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Valuing Electricity Service Attributes: A Choice Experiment Study in Madhya Pradesh, India

Author

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  • Gunatilake, Herath

    (Asian Development Bank)

  • Patail, Sumeet

    (NEERMAN Research Consultant Group)

  • Chen Yang, Jui

    (Research Triangle Institute)

Abstract

This paper presents the results of a choice experiment study undertaken to value electricity service attributes in Madhya Pradesh, India. Primary data was collected from 2,083 households using stratified random sampling method. Results show that existing service is very poor and consumers have substantial willingness to pay (WTP) for changing the status quo. Amongs the studied service attributes, hours of supply captures the highest WTP and WTP declines significantly with reduced hours of supply. However, quality, customer service, and accuracy of billing together accounts for 56% of the total WTP. Assessment of WTP with different service attribute combinations show that value of other service attributes become relatively more important when supply is less than 24 hours. Simulations show that uptake rates increase substantially when improved hours of supply is supplemented with other service attributes. Development impact of $1.2 billion worth physical infrastructure investments on Madhya Pradesh power distribution network for 24-hour supply can be significantly enhanced if quality, customer service, transparency, and accuracy of billing are also improved simultaneously.

Suggested Citation

  • Gunatilake, Herath & Patail, Sumeet & Chen Yang, Jui, 2012. "Valuing Electricity Service Attributes: A Choice Experiment Study in Madhya Pradesh, India," ADB Economics Working Paper Series 316, Asian Development Bank.
    • Handle: RePEc:ris:adbewp:0316
    Note: http://www.adb.org/sites/default/files/pub/2012/economics-wp316.pdf
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    Cited by:

    1. Jimenez, Raul & Serebrisky, Tomas & Mercado, Jorge, 2016. "What does “better” mean? Perceptions of electricity and water services in Santo Domingo," Utilities Policy, Elsevier, vol. 41(C), pages 15-21.
    2. Musiliu O. Oseni, 2017. "Self-Generation and Households' Willingness to Pay for Reliable Electricity Service in Nigeria," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4).
    3. Owuor, Margaret Awuor & Mulwa, Richard & Otieno, Philip & Icely, John & Newton, Alice, 2019. "Valuing mangrove biodiversity and ecosystem services: A deliberative choice experiment in Mida Creek, Kenya," Ecosystem Services, Elsevier, vol. 40(C).
    4. Bigerna, Simona & Choudhary, Piyush & Jain, Nikunj Kumar & Micheli, Silvia & Polinori, Paolo, 2024. "An empirical investigation of the Indian households’ willingness to pay to avoid power outages," Energy Policy, Elsevier, vol. 184(C).
    5. Bernadeta Gołębiowska, 2020. "Preferences for demand side management—a review of choice experiment studies," Working Papers 2020-05, Faculty of Economic Sciences, University of Warsaw.

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