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

Andres Susaeta, Pankaj Lal, Janaki Alavalapati, Evan Mercer

Research output: Contribution to journalArticle

36 Scopus citations

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.

Original languageEnglish
Pages (from-to)1111-1118
Number of pages8
JournalEnergy Economics
Volume33
Issue number6
DOIs
StatePublished - 1 Nov 2011

Keywords

  • Choice experiment
  • Electricity
  • Willingness to pay
  • Woody biomass

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