Italian consumers’ willingness to pay for renewable energy sources

Bigerna, Simona and Polinori, Paolo (2011): Italian consumers’ willingness to pay for renewable energy sources.

Abstract

EU Directive 2009/72/CE imposes to the European Countries environmental and energy targets. The Italian goal is to attain a 17% share in electricity production from renewable energy sources (RES) by 2020. To make investment in renewables attractive, market prices must be profitable and the gap between the private and social costs of renewables must be filled using “persuasive” tools. The acceptance of such a burden may be controversial because it results in an increase in prices. It is interesting to estimate the consumer’s willingness to pay (WTP) for green electricity. We based our research on a national survey conducted in November 2007 in Italy. We used a stochastic payment card (SPC) including a “certainty correction” and proposing five degrees of acceptance. An empirical analysis shows that there is a substantial willingness among Italian consumers to partially cover the cost of achieving the RES goal.

• Item Type: MPRA Paper
• Language: English
• Keywords: contingent valuation; interval data; stochastic payment card; renewable energy sources
• Subjects: Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q41 - Demand and Supply ; Prices; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q2 - Renewable Resources and Conservation > Q26 - Recreational Aspects of Natural Resources; C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C24 - Truncated and Censored Models ; Switching Regression Models ; Threshold Regression Models

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