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Households' willingness to pay for reliable electricity services in Ghana

Taale, Francis and Kyeremeh, Christian (2015): Households' willingness to pay for reliable electricity services in Ghana.

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Abstract

Access to reliable electricity is important in increasing the living standards of households and promoting sustainable development. However, Ghanaian households have had to grapple with frequent power outages and poor quality electricity services in recent times. This study examines the factors influencing households’ willingness to pay for reliable electricity services in Ghana. Using data collected from 950 households in the Cape Coast Metropolitan Area and the tobit regression technique, it was revealed that monthly income, prior notice on power outages, business ownership, separate meter ownership, household size and education significantly affect willingness to pay for reliable electricity services. On the average, households were prepared to pay 44 percent (GH¢6.8) more, relative to the mean monthly electricity bill in the sample, to improve electricity services. It is envisaged that the findings would be used by policy makers and utility companies to make electricity generation and distribution more sustainable and efficient.

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