Households’ Willingness to Pay for Undergrounding Electricity and Telecommunications Wires

McNair, Ben J. and Bennett, Jeff and Hensher, David A. (2010): Households’ Willingness to Pay for Undergrounding Electricity and Telecommunications Wires.

Abstract

Underground telecommunications and low-voltage electricity networks have several advantages over overhead networks including reliability of supply, safety and improved visual amenity. The economic viability of replacing existing overhead networks with new underground networks depends on the value of these benefits to households, but no complete value estimates are available in the literature. This paper represents a contribution towards addressing this research gap. A stated choice survey is used to estimate willingness-to-pay for undergrounding in established residential areas in Canberra. Average willingness-to-pay is at least $6,838 per household and there is significant variation in preferences over the population. The results suggest that benefits would be highest in areas with higher household income and older residents where visual amenity, safety, tree trimming or restrictions on the use of yard space are of concern.

• Item Type: MPRA Paper
• Language: English
• Keywords: Stated preference; willingness-to-pay; undergrounding; supply reliability
• Subjects: L - Industrial Organization > L9 - Industry Studies: Transportation and Utilities > L94 - Electric Utilities; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q51 - Valuation of Environmental Effects

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