understanding heterogeneous preferences in random utility models a latent class approach a finite mixture approach toconditional logit models is developed in whichlatent classes are used to promoteunderstanding of systematic heterogeneity the model is applied to wilderness recreationin which a branded choice experiment involvingchoice of one park from a demand system wasadministered to a sample of recreationists the basis of membership in the classes orsegments in the sample involved attitudinalmeasures of motivations for taking a trip aswell as their stated preferences overwilderness park attributes the econometricanalysis suggested that four classes of peopleexist in the sample using the model toexamine welfare measures of some hypotheticalpolicy changes identified markedly differentwelfare effects than the standard singlesegment model and provided insight into thedifferential impact of alternative policies

obtaining welfare bounds in discrete response valuation studies comment in a recent article published in land economics boman bostedt and kristrim 1999 hereafter bbk show how nonparametric lower bound intermediate and upper bound measures of average welfare change can be extracted from discrete response contingent valuation survey data building on the work of kristrim 1990 and haab and mcconnell 1997 the article appears to offer a promising route to getting estimates of mean willingness to pay wtp along with their respective variances without having to estimate parametric choice models thereby providing a computationally simple way to capture both the methodological uncertainty about the choice of a central tendency measure and the statistical uncertainty associated with any particular measure having an accurate estimate of the variance of mean wtp allows one to make confidence interval statements about mean wtp when measures of mean wtp and its variance are extracted

some macroeconomics for the 21st century this note describes a numerical simulation of a model of economic growth a simplified version of robert tamura s 1996 model of world income dynamics based on technology diffusion the model makes predictions for trends in average world income growth and about the evolution of the relative income distribution that accord well with observation the model is used to forecast the course of world income growth and income inequality over the century to come

the gender gap fertility and growth changes in fertility have long been recognized as important correlates of economic growth with the relationship between the level of fertility and the level of income per capita being one of the strongest observable correlations in cross country data this paper examines the linkages between fertility and growth theory the structure of the model is presented in sections on production couples decision making system dynamics and steady state equilibria the first component of the model is that increases in capital per worker raise womens relative wages since capital is more complementary to womens labor input than to mens the second component is that increasing womens relative wages reduces fertility by raising the cost of children more than household income finally lower fertility raises the level of capital per worker a positive feedback loop generates demographic transition a rapid decline in fertility accompanied by accelerated output growth

testing for non response and sample selection bias in contingent valuation analysis of a combination phone mail survey we use a combination phone mail survey to test for possible sample biases in contingent valuation we find no sample selection bias but do find non response bias we show how failure to correct for non response bias distorts aggregate benefit estimates

how much is too much an investigation of the effect of the number of choice sets context dependence and the choice of bid vectors in choice experiments in a split sample design we examine how the number of choice sets design of the first choice set context dependence and the choice of attribute levels in the cost attribute affect the precision in the elicited preferences in otherwise completely identical choice experiment surveys these issues are investigated for swedish households marginal willingness to pay to reduce power outages our results indicate that neither the number of choice sets nor the design of the first choice set has a significant impact on estimated marginal willingness to pay while the effect was significant for the additive scaling of the cost vector at the end of the article we discuss the implications of our results on future developments and applications of choice experiments

electricity outages in ghana are contingent valuation estimates valid african countries experience persistent and serious energy outages but while multiple valuation studies provide estimates of the costs of electricity outages in high income countries evidence is scarce for lower and middle income countries the few studies that assess the value of reliable energy supply rely on the contingent valuation method that is under wide scrutiny this paper aims to provide new estimates of households willingness to pay to reduce electricity outages for ghana and contributes to the debate on the validity of contingent valuation results for energy reliability our results suggest that households are willing to pay ghs 67 17 per month for reliable electricity supply equivalent to 7 of respondents income the results of tests for hypothetical bias wtp wta disparity and income effects suggest that the contingent valuation estimates from this study are robust and can support decision makers in prioritizing energy policies and investments

valuing the attributes of renewable energy investments increasing the proportion of power derived from renewable energy sources is becoming an increasingly important part of many countries s strategies to achieve reductions in greenhouse gas emissions however renewable energy investments can often have external costs and benefits which need to be taken into account if socially optimal investments are to be made this paper attempts to estimate the magnitude of these external costs and benefits for the case of renewable technologies in scotland a country which has set particularly ambitious targets for expanding renewable energy the external effects we consider are those on landscape quality wildlife and air quality we also consider the welfare implications of different investment strategies for employment and electricity prices the methodology used to do this is the choice experiment technique renewable technologies considered include hydro on shore and off shore wind power and biomass welfare changes for different combinations of impacts associated with different investment strategies are estimated we also test for differences in preferences towards these impacts between urban and rural communities and between high and low income households

economic dispatch savings in the coal fired power sector an empirical study of china abstract the current equal share dispatch approach has often been criticized for its negative influence on the electricity system operation in china which worsens the energy security environmental sustainability and affordability problems to provide references for the on going electricity market reform this study employs an optimization model to quantify the economic dispatch savings in the coal fired power sector key findings are summarized as follows 1 the heat rates of 2803 coal generators in china range from 273 91 gce kwh to 348 38 gce kwh units in 2014 and the great differences among these generators at different geographical areas exhibit the necessity for economic dispatch 2 5 67 of the coal used for power generation could be saved from economic dispatch in a provincial level the monetary value of which can reduce the average electricity price by 0 0058 yuan kwh in 2014 3 three major political and economic challenges hinder the transition from the current dispatch mode to economic dispatch namely the insufficient running hours for cost recovery limited cross border trading due to electricity over supply and local protectionism and the political economy problems from generators of different ownership types

estimation of the inconvenience cost of a rolling blackout in the residential sector the case of south korea abstract south korea is experiencing a serious imbalance in electricity supply and demand which caused a blackout in 2011 the korean government has planned to perform a rolling blackout to prevent large scale blackouts when the electricity supply reserve margin reaches less than 1 million kw this study attempts to estimate the inconvenience cost of household customers from a rolling blackout by using survey data to this end we apply a contingent valuation method cvm to measure their willingness to pay wtp in order to avoid a rolling blackout i e the suspension of electricity supply in this study we estimate the inconvenience costs stemming from both an unannounced and an announced rolling blackout as a result we find that the inconvenience cost of a sudden rolling blackout is estimated at 3900 67 krw 3 56 usd per month per household while that of an announced rolling blackout stands at 3102 95 krw 2 83 usd this difference in costs shows that people place value in receiving prior notice of a blackout and that inconvenience costs of between 166 0 billion krw 151 6 million usd and 174 3 billion krw 159 2 million usd per year can be reduced nationwide by giving households advance notice of a planned rolling blackout

marginal abatement costs of co2 emissions in the thermal power sector a regional empirical analysis from china abstract quantifying marginal abatement costs of co2 emissions are beneficial to estimate mitigation potentials and costs of china s regional thermal power sector based on the panel data of 30 provinces from 2004 to 2013 this study estimates the technical efficiency reduction potential and marginal abatement costs of co2 emissions from the thermal power sector in china using a parametric quadratic directional output distance function a regression analysis is undertaken to identify the factors that drive marginal abatement costs the main results are 1 the mean value of directional output distance function in china s thermal power sector is 0 0449 indicating that inefficient production of chinese thermal power sector accounts for 4 49 co2 emissions could be mitigated by accumulated 1 22 billion ton in the past ten year which is approximate 4 49 of total co2 emissions 2 the national weighted average marginal abatement costs of co2 emissions are 316 51 yuan ton which is far higher than carbon price in the current ets emission trading system pilots in china implying that carbon price does not inflect supply and demand of carbon allowance 3 the regression results show that the marginal abatement costs positively connect with regional power scale namely a 1 increase in power scale will result in a 13 8 increase technology level coal supply and power structure are negatively correlated with marginal abatement costs namely a 1 increase in technology level coal supply and power structure will result respectively in a 30 41 4 38 and 77 7 decrease

a real options valuation of chinese wind energy technologies for power generation do benefits from the feed in tariffs outweigh costs abstract in order to assess the viability of wind energy projects in china this paper takes a real options approach by accounting for flexibility over deployment of the technology in response to a stochastic non renewable energy cost the difference between the latter and the r d enhanced cost of renewable energy operation may be thought of as a benefit from using wind on the other hand the chinese government provides feed in tariffs to encourage further adoption of wind which should be included as a cost this work thus shows that there is substantial options value to china s wind energy program which is bolstered if the cost of carbon dioxide emissions is internalized moreover by varying the rate of feed in tariffs the model may be used to show plausible ranges for the feed in tariffs which could be a useful policy insight furthermore the study hypothesizes that with the likelihood of renewable energy to replace non renewable energy wind power in china can potentially reduce co2 emissions by approximately 6 4 by 2020 comparing to the 2005 level and highlights the significant role of wind power in china s emission targets and energy security this is a relevant paper especially given the importance of a sustainable energy transition for china more generally using the real options approach from a policy perspective could provide insights about the viability of renewable energy programs and robustness of feed in tariffs rates

measuring the demand for improved urban sanitation services results of a contingent valuation study in ouagadougou burkina faso in developing countries there are few institutional mechanisms for the incorporation of demand information in the planning of public services as a result misjudgements about consumer preferences have often led to poor project design and performance the contingent valuation method which relies on direct elicitation of consumer preferences and willingness to pay has emerged as one approach to address this shortcoming the paper describes an application of the method to facilitate demand driven planning for provision of improved sanitation in ouagadougou burkina faso the results suggest that demand information about unfamiliar technologies can be successfully obtained and can serve as a useful input in the design of public services

estimating energy conservation potential in china s energy intensive industries with rebound effect abstract the energy consumption of china s six most energy intensive sub industries is about half of the total national energy consumption and accounts for more than 70 of industrial energy consumption in recent years these six industries are capital and energy intensive and have a great impact on the energy consumption of china so they are directly related to the achievement of the energy conservation goal in the 13th five year plan this paper investigates the influential factors of energy consumption in the industries by employing the cointegration method and estimates the possible energy conservation potential considering energy rebound effect the results show that gdp and the scale of industries are the deterministic factors increasing energy consumption while r d intensity decreases it energy price has little impact on energy consumption the average energy rebound effect is calculated using the latent variable approach and the result is 90 75 considering energy rebound effect the energy conservation potential of china s energy intensive industries is 14 18 26 54 million tons of standard coal equivalent in 2020 and 44 64 80 72 million tons of standard coal equivalent in 2030

does environmental regulation affect energy efficiency in china s thermal power generation empirical evidence from a slacks based dea model abstract data envelopment analysis dea has gained much popularity in performance measurement of power industry this paper presents a slack based measure approach to investigating the relationship between fossil fuel consumption and the environmental regulation of china s thermal power generation we first calculate the total factor energy efficiency without considering environmental constraints an environmental performance indicator is proposed through decomposing the total factor energy efficiency the proposed approach is then employed to examine whether environmental regulation affects the energy efficiency of china s thermal power generation we find that the environmental efficiency plays a significant role in affecting energy performance of china s thermal generation sector decreasing the discharge of major pollutants can improve both energy performance and environmental efficiency besides we also have three main findings 1 the energy efficiency and environmental efficiency were relatively low 2 the energy and environmental efficiency scores show great variations among provinces 3 both energy efficiency and environmental efficiency are of obvious geographical characteristics according to our findings we suggest some policy implications

system dynamic modeling of energy savings in the us food industry abstract in the united states the food industry alone accounts for approximately 19 of the total energy consumed the objective of this study is to forecast the food related energy consumption and evaluate policy alternatives for reducing food related energy consumption in the medium and long term influential factors of energy consumption in the food industry include population growth rate gdp agriculture s share of gdp food waste technologies and agricultural investment based on the life cycle of the food industry five life stages were considered agricultural production industrial processing and packaging transportation wholesale and retail and household in this study based on the causal relationships and feedback loops between these factors and the energy consumed for each life stage a system dynamics sd model was designed to simulate the situation for the us food industry policy options of reducing waste percentage and improving industrial energy productivity are incorporated for building the energy use mitigation scenarios by implementing the integrated mitigation scenarios a 9 43 reduction in total food system energy consumption can be attained in 2030

optimal electricity supply reliability using customer shortage costs abstract this paper describes an economic cost benefit method for determining the optimal power system capacity and reliability of electricity supply using customer shortage costs the approach is based upon identifying a system plan that simultaneously considers cost of service as well as value of service and maximizes the net economic benefits taking into account the interdependence between electricity reliability price and demand in contrast to the existing literature on this subject which considers only customer outage costs this paper argues that it is the related but considerably broader notion of customer shortage cost that is more relevant in the context of optimizing the reliability of electricity supply the paper develops a method for estimating shortage costs and sketches an integrated framework for optimizing reliability using such costs

electricity rationing through a two stage mechanism analysis of interruptible service mechanisms has focused on the efficiency losses due to the absence of complete contingent contracts there exists a second type of inefficiency which to a large extent has been ignored it originates from the fact that the relative order or ranking of consumers willingness to pay for a given quantity generally varies throughout the contract period a more general model of electricity demand allowing for changes in the order of consumer willingness to pay for a given quantity is presented under such demand conditions the use of a two stage rationing mechanism is proposed rationing plans which maximize expected aggregate surplus are established in the first stage the second stage consists in a market for allocation rights to be operated once the states of nature are revealed allocations under this two stage mechanism are shown to be pareto superior to existing rationing plans directions for future research are discussed

project cost comparison under the clean development mechanism to inform investment selection by industrialized countries this is the first study that comprehensively evaluates and compares the average costs of six types of 4061 registered clean development mechanism cdm projects the projects were conducted from 2005 to 2014 by industrialized countries investing in host countries that had various technology and income levels specifically this study compares the average costs of emission reduction for each type of project projects were used by industrialized countries to achieve specific emission reductions commitments the lowest average cost per ton of reduced emissions found in renewable energy projects fuel switch projects supply side energy efficiency improvements and demand side energy efficiency improvements all of which were effectively reduced emissions by less than 1 million tons in host countries with high technology levels and upper medium income levels the average cost for the other two project types methane reduction and methane avoidance showed that these projects were more effective at reducing emissions by more than 50 million tons in host countries with upper middle technology levels and upper medium income levels these lowest average costs for different project types can guide project selection by industrialized countries seeking the lowest total emission reduction costs selection of cdm project investments by industrialized countries should account not only for the technology and income levels of host countries but also for the amounts by which industrialized countries have committed to reducing their emissions

application of flexible function forms in climate change research theoretical regularity and model selection abstract demand systems are widely applied to the energy and fuel demand research as result of growing concerns over climate change and global warming especially these issues in cities however in existing literature on consumer demand the authors too often ignore the theoretical regularity conditions or do not report the results of full regularity checks as a consequence the duality theory and second order conditions for optimizing behavior are invalid in face of the real world problem and the conclusions or suggestions proposed based on the empirical researches are thereby inappropriate and even misleading driven by the gap between theoretical models and practical problems we estimate the demand for road passenger transport in china which is considered to be one of the most important sources of air pollution in city using three flexible functional forms the rotterdam model the almost ideal demand system aids and the quadratic aids quaids we focus on all theoretical regularities positivity monotonicity curvature adding up homogeneity and symmetry and argue that unless there is a coincidence flexible functional forms are subject to certain theoretical regularities and that all these regularities are equally important both in theory and in practice empirical estimation shows that the aids model is the only model that is able to provide theoretically consistent estimation of the demand for road passenger transport in china our results also imply that the private transportation is elastic in price changes compared to urban public transportation and intercity public transportation we bridge the gap between theoretical modelling and empirical research on consumer energy fuel demand especially in the research about consumer demand for energy intensive products and services our study points out a crucially important fact that the researchers and policy makers must pay attention to the regularities of the theoretical modelling in the practical applications

economic transformation population growth and the long run world income distribution abstract we present and calibrate a model where trade with advanced economies spurs development and trade opportunities depend on the relative population in advanced and developing countries as developing countries become advanced prospects improve for the remaining developing countries if population growth differentials between developing and advanced economies are small economic development accelerates over time otherwise long run global prosperity requires a sufficiently large initial population in advanced countries more open countries develop faster but more openness by all developing countries may only modestly increase their aggregate growth china s development may hurt developing countries in the short run but improves their long run prospects

a canadian customer survey to assess power system reliability worth a common approach used in quantifying the worth or benefit of electric service reliability is to estimate the customer costs monetary losses associated with power interruptions customer surveys are often used to determine interruption costs the ieee power systems research group has conducted surveys of canadian electric utility customers in the residential commercial and industrial sectors these surveys were sponsored by the natural sciences and engineering research council and seven participating utilities this paper presents the overall results of these surveys with emphasis on the cost results

are we willing to pay enough to back the bid valuing the intangible impacts of london s bid to host the 2012 summer olympic games using a contingent valuation survey this paper provides the first empirical test of the proposition that intangible impacts might justify hosting major sporting events on cost benefit grounds respondents drawn from london manchester and glasgow were asked for their willingness to pay wtp to host the 2012 olympic games in london on the basis of the intangible impacts that this event might provide annual mean wtp is 22 12 and 11 per year for 10 years in these 3 uk cities respectively an illustrative total uk wtp for intangible impacts is in the region of 2 billion statistical analysis of wtp determinants reveals a range of plausible explanatory factors such as respondents degree of support for the bid

economic costs of electricity supply interruptions us and foreign experience abstract this paper investigates the costs of interruptions in electricity service to customers this information is a key input in planning power system reliability using an economic cost benefit approach the paper reviews the literature from the perspective of identifying alternate methodological approaches used their strengths and weaknesses and potential for bias it presents and compares outage cost estimates found in the literature on a common denominator basis it attempts to explain the sources of the wide range of variation observed in different study estimates and it identifies the need for further work on this important topic

economic development as self discovery in the presence of uncertainty about what a country can be good at producing there can be great social value to discovering costs of domestic activities because such discoveries can be easily imitated we develop a general equilibrium framework for a small open economy to clarify the analytical and normative issues we highlight two failures of the laissez faire outcome there is too little investment and entrepreneurship ex ante and too much production diversification ex post optimal policy consists of counteracting these distortions to encourage investments in the modern sector ex ante but to rationalize production ex post we provide some informal evidence on the building blocks of our model

the potential estimation and factor analysis of china s energy conservation on thermal power industry new huadu business school research fund national social science foundation of china 12zd059 ministry of education 10gbj013

does it matter when a power outage occurs a choice experiment study on the willingness to pay to avoid power outages using a choice experiment survey the marginal willingness to pay wtp among swedish households for reductions in power outages is estimated the results from the random parameter logit estimation indicate that the marginal wtp increases with the duration of the outages and is higher if the outages occur during weekends and during winter months moreover the random parameter logit model allows us to estimate a sample distribution of wtp and we find a significant unobserved heterogeneity in some of the outage attributes given that households have negative welfare effects from outages it is important that policy makers consider these negative impacts on household utility when regulating the swedish electricity market

the willingness to pay by households for improved reliability of electricity service in north cyprus abstract this research examines households willingness to pay wtp for an improved electricity service households wtp is estimated using the payment ladder contingent valuation cv data from 350 in person interviews in north cyprus in order to avoid the cost of outages households are willing to incur a 13 8 increase in their monthly electricity bill a cost benefit analysis cba indicates that the annualized economic benefits of improved reliability of the electricity service would be approximately usd 35 6 million for the residential sector this figure is more than enough to finance the investments needed to completely eradicate any electricity outages in addition the fuel savings from substituting the generation of the new plants for the old plants would yield about usd 32 9 million per year in fuel savings hence a change from the current low reliability policy to one of providing a high quality service would yield an economic net present value to the residents of north cyprus of twice the investment costs or usd 173 3 million within five years

how the removal of energy subsidy affects general price in china a study based on input output model abstract in china most energy prices are controlled by the government and are under priced which means energy subsidies existing reforming energy subsidies have important implications for sustainable development through their effects on energy price energy use and co 2 emission this paper applies a price gap approach to estimate china s fossil fuel related subsidies with the consideration of the external cost results indicate that the magnitude of subsidies amounted to cny 1214 24 billion in 2008 equivalent to 4 04 of gdp of that year subsidies for oil products are the largest followed by subsidies for the coal and electricity furthermore an input output model is used to analyze the impacts of energy subsidies reform on different industries and general price indexes the findings show that removal of energy subsidies will have significant impact on energy intensive industry and consequently push up the general price level yet with a small variation removing oil products subsidies will have the largest impact followed by electricity coal and natural gas however no matter which energy price increases ppi is always the most affected then gdp deflator with cpi being the least corresponding compensation measures should be accordingly designed to offset the negative impact caused by energy subsidies reform

asian growth and african development since world war ii integration with the world economy has arguably been the chief route from poverty to wealth japan initially exported cheap goods and later moved on to more technologically sophisticated products when japan became rich korea taiwan province of china hong kong sar and singapore replaced japan as low wage exporters and when these countries moved on to more sophisticated products thailand and malaysia filled their niche more recently china has become an important exporter of manufactured goods and india is increasingly moving into services exports no mainland sub saharan african country has experienced this type of transformation even countries that have undergone major economic reforms seem far from takeoff forecasts for africa based on extrapolation of its historical experience tend to be bleak we consider whether it is possible to construct a model consistent with the data which supports a more optimistic view motivated by the asian experience the model assumes countries can potentially undergo rapid economic transformation only if they integrate into the world economy by producing nontraditional exports for the purposes of constructing a long run model of the world economy we are agnostic on whether exports matter due to technological learning by doing spillovers political economy considerations or other factors as each developing country transforms and becomes advanced it further improves trade opportunities for the remaining developing countries for example if china becomes rich a billion more people will live in countries that import toys and a billion fewer will live in countries that export them our approach is similar to that of robert e lucas 2000 in that we assume growth prospects improve with the state of the world economy potentially generating accelerating world growth unlike lucas 2000 however we allow for differential population growth between rich and poor countries the steady state proportion of the world population living in advanced countries depends on the rate at which developing countries transform into advanced ones and on the magnitude of population growth differentials between these two groups of countries the economic transformation process will overcome the demographic trend leading to a prosperous steady state only if the initial share of world population in advanced countries is above a threshold a simple calibration using historical data suggests that the longrun prospects for lagging developing regions may hinge on a race between economic growth in china and india and population growth in the lagging regions particularly africa if the former wins we may eventually observe accelerating global growth this suggests some caution should be used when interpreting empirical studies on growth determinants as these results may not be stable over time country characteristics that lead to poor performances today may well allow for rapid growth in the future if and when the world economy reaches a sufficiently advanced stage our model also suggests a queuing effect where the order in which countries are absorbed into the world economy is determined by the quality of their policies economic reforms in one country may potentially have a large impact on growth if they move the country to the front of the queue but similar reforms in all countries may have a much smaller impact on world growth

energy efficiency in world bank power sector policy and lending new opportunities abstract this paper examines the role of and opportunities for energy efficiency in the world bank s electric power sector policy and lending it finds that the dynamic environment in which the bank operates provides substantial opportunity for the bank to more effectively fulfill its mandate through an aggressive effort to develop the energy efficiency market opportunities in its client countries the paper finds a variety of market conditions that indicate both an opportunity for the bank in efficiency markets and a need for bank influence in the development of these markets in assessing the bank s current policy and lending practices the paper finds that the bank continues to be fundamentally oriented towards the traditional supply side measures that have long defined the bank s focus between 1992 and 1996 less than one half of one percent of the bank s power sector loans financed demand side efficiency improvements by neglecting the significant potential for demand side efficiency improvements the bank is missing major opportunities to fulfill its mandate in developing countries and capitalize on the investment opportunities in this business in new markets as the flow of private sector financing to developing country power sectors grows the bank s continued focus on traditional supply side investments is increasingly inconsistent with its mandate to be a lender of last resort yet more importantly in neglecting the emerging energy efficiency market the bank is missing a strategic opportunity to foster environmentally sound development in developing countries and establish a vital new role for itself in the dynamic power sector the paper recommends that the bank take advantage of this opportunity by adopting a new approach to the power sector one that combines continued pricing reforms with institutional reforms and capital investments in both demand side efficiency and supply side expansion towards this end it identifies ways in which the bank could finance large scale investments in demand side efficiency in developing countries finally the paper suggests that only by considering such energy efficiency investments early in the project identification process rather than as an add on to projects fundamentally conceived as supply side projects will the full potential for such investments be realized

welfare evaluations in contingent valuation experiments with discrete response data comment in the case of private goods individuals reveal their preferences in the market place no similar market mechanism exists in the case of public goods however one obvious possibility is to ask people about their maximal willingness to pay for public goods or government expenditure johansson 1987 1990 miller in some recent contingent market valuation studies people instead have been asked to accept or reject a specified amount of money for a change in the provision of a public good different subsamples are confronted with different bids the resulting yes and no responses usually are analyzed by logit or probit techniques e g johansson and kristrom this raises the question of how to compute the average willingness to pay when only yes and no responses are available this point was advanced by hanemann in his seminal 1984 paper on welfare evaluations with discrete responses see also hanemann 1987 however we believe a minor imperfection in hanemann s presentation may confuse and mislead practitioners hanemann s approach assumes that negative bids cannot occur but at the same time gives the impression that it also applies to models that allow for negative bids we also extend hanemann s discussion of the choice of money measure in cost benefit analysis

willingness to pay and willingness to accept how much can they differ comment i agree with the point made by edoh y amiran and daniel a hagen 2003 that there can be a substantial or even infinite divergence between the wta and wtp for a public good even where there is a nonzero elasticity of substitution between market goods and the public good provided that the indifference curves are asymptotically bounded with respect to market goods in the manner they describe this is an important point they are also correct to point out that the elasticity of substitution is a local concept whereas their asymptotic boundedness condition applies also for discrete changes my 1991 paper used a local analysis because it was following the structure of the analysis in robert d willig 1976 and alan randall and john r stoll 1980 i wanted to show that while randall and stoll appeared to extend willig s local result on wta versus wtp from price changes to changes in the quantity of a public good the relevant elasticity was in fact different and involved the substitution elasticity as well as the income elasticity i view these points by amiran and hagen as not two separate results but essentially the same result their asymptotic boundedness condition generalizes my zero elasticity of substitution condition to discrete changes the asymptotic boundedness condition can be expressed as follows assuming a bivariate utility function u x q and given a reference point x q associated with a reference utility level u u x q there exists some q q such that for all q q there exists no x such that u x q u in other words no amount of x can substitute for the reduction in public good from q to q q in the case of a zero elasticity of substitution q q but as amiran and hagen show in their theorem 1 this is unnecessarily restrictive when dealing with a discrete reduction in q furthermore their theorem 2 can be viewed as a special case of their theorem 1 in which q 0 which makes q an essential commodity it is well known in consumer theory that the wta to avoid the loss of an essential market good is infinite their theorem 2 extends this result to the case of an essential nonmarket good but as their theorem 1 shows essentialness is not necessary for an infinite wta the boundedness condition is the key and this implies a fundamental lack of substitutability between money market goods and the public good

response bias in a conjoint analysis of power outages abstract a methodology is proposed for estimating status quo effects resistance to change and loss aversion willingness to pay is less than willingness to accept from consumer survey data conjoint data on israeli households attitudes to electricity outages reveal that both of these effects are pronounced and that they depend on the interviewees characteristics ordered conditional logit estimation indicates that while the estimates are rank sensitive the suggested methodology continues to be applicable finally the conjoint estimates are compared with those obtained by applying the method of contingent valuation

a framework to implement supply and demand side contingency management in reliability assessment of restructured power systems this paper presents a framework to implement supply and demand side contingency management in the reliability assessment of hybrid power markets a model for the independent system operator iso to coordinate reserve and load curtailment bids for contingency states is introduced to balance reliability worth and reliability cost the load curtailments and generation re dispatch for a contingency state are determined based on minimizing the market interruption cost using an optimization technique a nonsequential monte carlo simulation technique based on this framework has been proposed to evaluate the customer reliability of restructured power systems with the hybrid market model the modified ieee reliability test system rts is used to illustrate the proposed technique

contingent valuation and social choice the contingent valuation method for estimating the existence value of natural resources is examined for psychophysical robustness statistical reliability and economic sensibility extensions of standard models for willingness to pay and suitable econometric techniques for analyzing these models are developed the analysis is applied to a series of experiments on the value of preserving wilderness areas in the western united states the results call into question the reliability of the cv method for estimating existence values

households willingness to pay for water service attributes water consumption and disposal are often taken for granted as essential services with required levels of service quality yet little is known about how much consumers are willing to pay for specific service levels as customers in many countries face changing levels of water availability especially shortages linked possibly to climate change and limited catchment capacity the need to assess the value and hence benefit to society of varying service levels and prices in an effort to secure the provision of and disposal of water has risen on public agendas in an attempt to establish how much customers are willing to pay for specific levels of service we use a series of stated choice experiments and mixed logit models to establish the willingness to pay to avoid interruptions in water service and overflows of wastewater differentiated by the frequency timing and duration of these events the empirical evidence is an important input into the regulatory process for establishing service levels and tariffs as well as useful planning information for agencies charged with finding cost effective ways of delivering services at prices that customers deem to be value for money

electricity tariffs in india an assessment of consumers ability and willingness to pay in gujarat abstract a sample of electricity consumers covering agricultural residential and industrial consumers in the indian state of gujarat was surveyed in 1997 to investigate the consumers ability and willingness to pay for electricity supplied from the grid the ability to pay was estimated using the weight of the cost of electricity to meet at least the basic household needs in relation to the overall income or expenditure the willingness to pay was estimated using the costs of meeting the needs by alternative sources of energy namely diesel in the case of farmers to pump water for irrigation and captive power generation using diesel generators in the case of industrial users survey results reveal the proportion of consumers in different categories which do not have the ability to pay more or are even not willing to pay more for electricity the survey findings have been used as a guideline in the proposed adjustment of tariffs charged by the gujarat electricity board

using a choice experiment to account for preference heterogeneity in wetland attributes the case of cheimaditida wetland in greece abstract this paper aims to assist policy makers in formulating efficient and sustainable wetland management policies in accordance with the ramsar convention and the european union water framework directive 2000 60 ec by providing results of a valuation study on the cheimaditida wetland in greece a choice experiment is employed to estimate the values of changes in several ecological social and economic functions that cheimaditida wetland provides to the greek public in addition to the conditional logit model a random parameter logit model a random parameter logit model with interactions and a latent class model are estimated to account for heterogeneity in the preferences of the public for the various functions of the wetland the results reveal that there is considerable preference heterogeneity across the public and on average they derive positive and significant values from sustainable management of this wetland the estimated economic benefits of sustainable wetland management are weighed against the costs of alternative wetland management scenarios results of this cost benefit analysis can aid in the design of socially optimal policies for sustainable management of the cheimaditida wetland with possible implications for other similar wetlands in greece and the rest of europe

estimating the willingness to pay for water services in developing countries a case study of the use of contingent valuation surveys in southern haiti progress in improving the quality and quantity of water used by people in rural areas of the developing world has been unsatisfactory in two respects 1 supplies that have been built are frequently neither used correctly nor properly maintained and 2 extension of improved service to unserved populations has been slow though this poor record is not the result of a single factor a major impediment to improved performance is inadequate information on the response of consumers to new service options the behavioral assumptions that typically underlie most rural water supply planning efforts are simple it is commonly assumed that so long as financial requirements do not exceed 5 of income rural consumers will choose to abandon their existing water supply in favor of the improved system several reviews by the world bank bilateral donors and water supply agencies in developing countries have shown however that this simple model of behavioral response to improved water supplies has usually proved incorrect 1 in rural areas many of those served by new systems have chosen to continue with their traditional water use practices

dynamic aid allocation abstract this paper introduces a framework for studying the optimal dynamic allocation of foreign aid among multiple recipients we pose the problem as one of weighted global welfare maximization a donor in the north chooses an optimal path for international transfers anticipating that consumption and investment decisions will be made by optimizing households in the south and accounting for limits in the extent to which recipients can effectively absorb aid we present quantitative results on optimal aid policy by applying our approach to a neoclassical growth model where the scope for aid funded growth is determined by the recipients distance from steady state

protest responses in contingent valuation a significant number of respondents to contingent valuation surveys tend to either state a zero bid or refuse to state a bid at all for reasons associated with the process of valuation these protest responses are routinely removed from contingent valuation samples because it is assumed that they are not indicative of respondents true values the censoring of protest responses has led to the emergence of a definitional controversy one view is that the definition of protest responses and the rules for censoring them are dependent on whether the practitioner conceives of the contingent valuation survey as a market or as a referendum however what is not acknowledged is the possibility that protest responses and their meaning may vary according to the type of good being valued the elicitation format and the interaction between these elements and external factors this potential renders the development of unambiguous rules for censoring protest responses difficult moreover when willingness to pay is viewed as a behavioural intention it becomes important to determine what the responses actually mean this approach does not assume an interpretative position a priori against which the responses should be judged but seeks to inform an existing understanding which is inadequate

how much have electricity shortages hampered china s gdp growth abstract based on an econometric analysis of the annual growth data for china s gdp and electricity generation from 1953 to 2010 we find that electricity generation growth granger causes gdp growth but not vice versa we also find that the gdp elasticity of electricity generation is about 0 6 implying that a 1 increase in china s electricity generation growth would increase gdp growth by 0 6 while deng s reform raised china s gdp growth rate by about 5 per year it did not alter the gdp elasticity of electricity generation hence an obvious strategy to promote china s economic growth would be accelerating electricity generation expansion rapidly adding thermal generation units however could have large scale adverse environmental impacts we therefore support china s 2011 five year plan which calls for expanding investments in renewable energy conservation and energy efficiency as well as improving china s integrated electricity planning and cost based pricing decisions

reliability worth assessment in a developing country residential survey results this paper presents the results of a residential customer survey conducted in service areas of the nepal integrated electric power system nps the objective was to determine the power interruption costs incurred by the residential customers of a developing country and extend the customer survey approach to reliability worth evaluation in a developing environment interruption cost estimates were obtained using in person interviews with 944 sample customers the results indicate the implications of service reliability to residential customers of nepal and show that reliability worth evaluation in a developing country is both possible and practical

costs and potentials of energy conservation in china s coal fired power industry a bottom up approach considering price uncertainties abstract energy conservation technologies in the coal fired power sector are important solutions for the environmental pollution and climate change issues however a unified framework for estimating their costs and potentials is still needed due to the wide technology choices especially considering their economic feasibility under fuel and carbon price uncertainties therefore this study has employed a bottom up approach to analyze the costs and potentials of 32 key technologies new promotions during the 13th five year plan period 2016 2020 which combines the conservation supply curve csc approach and break even analysis findings show that 1 these 32 technologies have a total coal conservation potential of 275 77 mt with a cost of 238 82 billion yuan and their break even coal price is 866 yuan ton 2 steam water circulation system has the largest energy conservation potential in the coal fired power industry 3 considering the co benefits will facilitate these technologies promotions because their break even coal prices will decrease by 2 35 yuan ton when the carbon prices increase by 1 yuan ton 4 discount rates have the largest impacts on the technologies cost effectiveness while the future generation level affect their energy conservation potentials most

dynamics of final sectoral energy demand and aggregate energy intensity this paper proposes a regional and sectoral model of global final energy demand for the main end use sectors of consumption industrial commercial and public services residential and road transportation per capita demand is expressed as an s shaped function of per capita income other variables intervene as well like energy prices temperatures and technological trends this model is applied on a panel of 101 countries and 3 aggregates covering the whole world and it explains fairly well past variations in sectoral final consumption since the beginning of the 2000s further the model is used to analyze the dynamics of final energy demand by sector and in total the main conclusion concerns the pattern of change for aggregate energy intensity the simulations performed show that there is no a priori reason for it to exhibit a bell shape as reported in the literature depending on initial conditions the weight of basic needs in total consumption and the availability of modern commercial energy resources various forms might emerge

willingness to pay for green electricity in korea a contingent valuation study abstract green electricity is energy that is generated from renewable energy sources such as solar power wind power small scale hydroelectric power tidal power and biomass power these sources mostly do not produce pollutants and are considered environmentally friendly however considering the current state of technology they are more costly government should take visible actions to compensate for the increased production costs this paper attempts to apply a contingent valuation cv method to obtain at least a preliminary evaluation of the benefits that ensue from the introduction of the policy that raises the percentage of green electricity consumption from 0 2 of the total electricity supply to 7 by 2011 overall the cv survey was successful in eliciting the willingness to pay wtp for green electricity considering that the cv method operated within respondents abilities to answer and the wtp estimates were statistically significant the monthly mean wtp estimates from parametric and non parametric methods were krw 1681 usd 1 8 and krw 2072 usd 2 2 respectively the estimates of the annual benefits to relevant residents amounted to krw 150 5 billion usd 157 5 million and krw 185 6 billion usd 194 2 million respectively

implementing china s national energy conservation policies at state owned electric power generation plants abstract china s 11th five year guideline identified energy conservation as one of the country s fundamental policies and established a mandatory target 20 reduction in national average energy intensity by 2010 despite the various policies laws and administrative reforms to support energy conservation china fell behind schedule for meeting its conservation targets in 2006 and 2007 using a combination of available literature and an interview based case study this paper examines the implementation of energy conservation and investigates impediments to achieving china s conservation goal in the electric power generation sector three key impediments are detailed 1 municipal governments incentives to overlook conservation related central directives primarily because of budget pressures linked to financial decentralization 2 procedural obstacles in the form of time required to obtain project approvals for high efficiency power generation units and 3 financial obstacles making it difficult for power generation enterprises to raise capital for energy conservation projects an interview based case study of a state owned coal fired electric power generation company demonstrates the influence of the aforementioned obstacles while procedural obstacles are notable they can be managed however electricity pricing reforms and or stronger subsidy programs will be needed to address the financial obstacles facing chinese power generation companies

the value of online banking to small and medium sized enterprises evidence from firms operating in the uae free trade zones abstractthis study estimates the willingness to pay of small and medium sized enterprises smes for a business online banking services the estimation utilizes a contingent valuation method employing data from 400 smes in the united arab emirates free zones an interval regression model is used to identify company characteristics affecting wtp the results indicate an average wtp for online banking of 518 50 per month firms engaging in international trade value these services at least 10 more than those with only domestic operations other variables that significantly affect wtp include number of employees and the transportation cost of using traditional branch banking

estimating the willingness to pay for reliable electricity supply a choice experiment study abstract this research examines households willingness to pay wtp for an improved electricity service households stated wtp is estimated using the choice experiment ce method the data used in the estimations come from 350 in person interviews conducted during the period 5 22 august 2008 in north cyprus compensating variation cv estimates for a zero outage scenario are calculated using the parameter estimates from the mixed logit ml model these are 6 65 ytl turkish lira per month 3 02 usd for summer and 25 83 ytl per month 11 74 usd for winter in order to avoid the cost of outages households are willing to incur a 3 6 and a 13 9 increase in their monthly electricity bill for summer and winter respectively the wtp per hour unserved is 0 28 ytl 0 13 usd for summer and 1 08 ytl 0 49 usd for winter a preliminary cost benefit analysis indicates that the annualized economic benefits are approximately 42 7 million ytl 19 4 million usd for the residential sector this would justify an investment in additional generation capacity of approximately 268 mw which is far more than that which is needed to eliminate the service reliability problem

choice experiment study on the willingness to pay to improve electricity services abstract modern forms of energy are an important vehicle towards poverty alleviation in rural areas of developing countries most developing countries households rely heavily on wood fuel which impacts on their health and socio economic status to ease such a dependency other modern forms of energy namely electricity need to be provided however the quality of the electricity service namely reliability is an important factor in reducing this dependency this paper discusses a choice experiment valuation study conducted among electrified rural households located in kisumu kenya in which the willingness to pay wtp to avoid power outages or blackouts was estimated a mixed logit estimation was applied to identify the various socio economic and demographic characteristics which determine preferences in reducing power outages among a household s users in conclusion several of the socio economic and demographic characteristics outlined in this paper were identified and can assist service differentiation to accommodate the diverse households preferences towards the improvement of the electricity service