market segmentation and willingness to pay for green electricity among urban residents in china the case of jiangsu province the objective of this study is to identify market segments and estimate the residents willingness to pay wtp for green electricity green e in china for the large scale promotion of energy projects from renewable sources that do not rely solely on energy policies based on an analysis of non use values of green e as well as the application of the contingent valuation cv method and payment card pc introduction technology the average wtp ranges from rmb 7 91 yuan month to 10 30 yuan month approximately us 1 15 1 51 month with an exchange rate of 6 83 yuan us yuan us for urban residents in jiangsu province the current work also explores the differences in demographic variables across varying wtp amounts and the different marginal effects of demographic variables at the same level of wtp the findings reveal that there are significant differences in demographic variables such as level of education household income and location of residence across the population segments moreover the finding that some respondents with high income and higher education prefer higher wtp amounts to lower wtp amounts suggests that green e is a luxury product and consequently a veblen effect exists in certain chinese market segments

resolving differences in willingness to pay and willingness to accept reply gwendolyn c morrison 1997 raises a logical point regarding our experimental test of the divergence between willingness to pay wtp and willingness to accept wta measures of economic value shogren et al 1994 she argues that our design does not provide a true test of the existence of a fundamental endowment effect since we did not control for the potential of a pivoting indifference map daniel kahneman et al 1990 she concludes that even though our ev idence shows that the mean wtp and wta bids for market goods with close substitutes e g candy bars and coffee mugs converge after market experience the endowment effect might still be alive and well albeit at statisti cally insignificant levels

labor migration and economic growth in east and southeast asia east and southeast asia face major demographic changes over the next few decades as many countries labor forces will start to decline while others will experience higher labor force growth as populations and participation rates increase a well managed labor migration strategy presents itself as a mechanism for ameliorating the impending labor shortages in some east asia pacific countries while providing an opportunity for other countries with excess labor to provide migrant workers that will contribute to the development of the home country through greater remittance flows although migration would be unable to offset the economic impacts of the declining labor forces in the countries with shrinking populations a more flexible migration policy allowing migrants to respond to the major demographic changes occurring in asia over the next 50 years would be beneficial to most economies in the region in terms of real incomes and real gross domestic product over the 2007 2050 period such a policy could deeply affect the net migration position of a country countries that were net recipients under current migration policies might become net senders under the more liberal policy regime

a dynamic explanation of the willingness to pay and willingness to accept disparity a fundamental tenet in neoclassical theory is the basic independence assumption an individual s preferences are assumed to be measured over levels not changes although most theoretical and applied economic models invoke this assumption a wealth of data from laboratory experiments refutes this premise as systemic empirical disparities have been observed between willingness to pay wtp and willingness to accept wta for the same good e g kahneman knetsch and thaler 1990 with wta often observed to be many times larger than wta in an influential line of work hanemann 1991 argues that the large wta wtp disparities that have been observed in the literature can be reconciled with static neoclassical theory via income and substitution effects i but the empirical evidence to date has not conformed well to hanemann s 1991 or any other neoclassical based model 2 if the observed value disparity is inconsistent with neoclassical explanations and is found to be a fundamental component of individual s preferences as per reference dependent theory kahneman and tversky 1979 tversky and kahneman 1991 then a reevaluation of a good deal of economic analysis is necessary in this article we provide a different explanation for the wta wtp disparity a dynamic theory based on the presence of commitment costs and possibly asymmetric beliefs about market opportunities when the value of a good is uncertain wtp and wta will logically reflect compensation for the possibility of learning that the good has a different value than believed at the time of purchase or sale and the cost associated with reversing the purchase or sale decision in its simplest form our model predicts that with objective symmetric beliefs about market opportunities and with perfect substitutability and no income effects there should be no value disparity intuitively the objective cost of delaying the purchase or alternatively reversing the purchase for prospective buyers is isomorphic to the objective cost of reversing or delaying the sale for prospective sellers this symmetry necessarily leads to wta wtp consistent with the neoclassical paradigm importantly however it is an agent s perception of the delay and reversal costs that motivates behavior if agents behave in a manner consistent with the developing literature on cognitive dissonance and or limited memory it is quite plausible for individuals to display an asymmetric perception of the relative costs of selling later depending upon whether they are placed in the role of a buyer or seller 3 this type of asymmetry alone can yield the systematic value divergences observed in the literature indeed we show that even with only slight asymmetries in beliefs of perceived costs our theory can generate considerable value divergences because the actual divergence will depend upon the interaction of this asymmetry with the degree of value uncertainty time preference and lost value of consumption we explore the predictive power of our theory by examining wta and wtp statements of value from consumers in a competitive marketplace the sportscard market although we do not consider the sportscard marketplace particularly worthy of study in its own right it is useful for our purposes for several reasons first it is a natural setting for an examination of preference structures because it provides a rich pool of subjects making decisions in a familiar environment with uncertainty and future learning about the values of traded goods second we can identify factors that arise endogenously such as market experience and impose the remaining controls necessary to implement a clean experiment to explore whether such factors attenuate the value disparity through the channels predicted by our theory our data are striking in that agents display an asymmetric perception of the relative costs of selling later depending upon whether they are placed in the role of a buyer or seller

environmental pricing of externalities from different sources of electricity generation in chile abstract the rapid increase in electricity demand in chile means a choice must be made between major investments in renewable or non renewable sources for additional production current projects to develop large dams for hydropower in chilean patagonia impose an environmental price by damaging the natural environment on the other hand the increased use of fossil fuels entails an environmental price in terms of air pollution and greenhouse gas emissions contributing to climate change this paper studies the debate on future electricity supply in chile by investigating the preferences of households for a variety of different sources of electricity generation such as fossil fuels large hydropower in chilean patagonia and other renewable energy sources using double bounded dichotomous choice contingent valuation a novel advanced disclosure method and internal consistency test are used to elicit the willingness to pay for less environmentally damaging sources policy results suggest a strong preference for renewable energy sources with higher environmental prices imposed by consumers on electricity generated from fossil fuels than from large dams in chilean patagonia policy results further suggest the possibility of introducing incentives for renewable energy developments that would be supported by consumers through green tariffs or environmental premiums methodological findings suggest that advanced disclosure learning overcomes the problem of internal inconsistency in sb db estimates

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

the disparity between willingness to accept and willingness to pay measures of value psychologists have long argued that people are much more averse to a loss than attracted to an equivalent gain this behavior termed loss aversion has been formalized by kahneman and tversky 1979 in their reformulation of expected utility theory prospect theory in prospect theory the utility function is replaced by a value function that evaluates changes in income from the current level increases in income are weighted by a relatively small marginal utility decreases in income are weighted by a much larger marginal utility in effect the value function implies that a kink in the relationship between utility and income occurs at the initial income or reference point and that the slope of the utility function for losses in income is steeper than it is for gains in a recent paper knetsch and sinden 1984 report a series of experiments that demonstrate the existence of a large disparity between willingness to accept wta and willingness to pay wtp measures of value they argue that the psychological theory of loss aversion explains this difference economic theory would suggest that individuals who exhibit a large disparity between wta and wtp are perhaps underperceiving the value of gains or overperceiving the value of losses are behaving in an irrational manner and will consequently achieve a lower level of well being than if they behaved in a true utility maximizing manner this would in contrast to loss aversion usually imply near equal values for wta and wtp see willig 1976 further documentation of a larger than expected disparity between wta and wtp has been obtained in surveys asking for the value of a variety of public goods for example cummings brookshire and schulze 1986 document six

economic globalization and women s employment the case of manufacturing in mexico sociological research has been generally critical of the effects of economic globalization on developing countries however greater worldwide economic integration may have created new employment o

energy demand in ghana a disaggregated analysis this paper presents a comprehensive analysis of energy demand in ghana by estimating demand functions for key disaggregated energy components including gasoline diesel liquefied petroleum gas lpg kerosene biomass residual fuel oil rfo and electricity our results show that energy prices income urbanization and economic structure are significant demand drivers of the different energy types in ghana with varying estimated elasticities further there is evidence of high degree of inter fuel substitution in energy demand in ghana particularly from gasoline diesel and kerosene towards lpg consumption we recommend among different policy options a customization of energy price subsidization policies especially on lpg to reduce the unintended beneficiary dilemma or spillover effect of current government policy other policies such as intensification of energy conservation programs and market entry of independent power trading companies to enhance energy service delivery through competition are also discussed

residential consumers in the cape peninsula s willingness to pay for premium priced green electricity a number of studies have explored the willingness i e stated willingness as opposed to actual willingness of consumers to pay a premium for green electricity in developed countries however little is known about how this translates into an emerging economy context this study investigates the level of willingness of residential households in south africa s cape peninsula to pay a premium for electricity from renewable energy it methodologically drew on recent contributions in the literature on norm motivated behaviour used to identify testable factors that could influence residential consumers willingness to pay wtp interestingly the study found a significant positive link between household income and wtp for green electricity contrary to the findings of some previous studies not only are higher income households more likely to pay a premium but typically they are also willing to pay a bigger premium it was also further established that the view that green electricity is reliable involvement in the recycling of waste and the belief that everyone should contribute to green electricity generation drive the wtp

movement of natural persons and the gats trade in services has expanded considerably in recent years however numerous regulatory barriers constrain such trade especially when it involves the temporary cross border movement of labour also termed movement of natural persons many developing countries have the potential to export services through cross border movement of professional semi skilled and unskilled labour the general agreement on trade in services gats seeks to progressively liberalise trade in services via different modes of supply including the movement of natural persons under the first round of gats negotiations member countries have made sectoral and cross sectoral commitments to promote trade in services for these different modes of supply this paper discusses the significance of and various constraints to the movement of natural persons in service trade it also assesses the nature of liberalisation that has occurred in this mode of supply under gats and notes the limited progress made in this regard in view of the ongoing round of gats negotiations it suggests ways to stregthen the overall gats framework through greater transparency and specificity in the commitments on movement of natural persons and through the introduction of various multilateral disciplines

the value of supply security the costs of power outages to austrian households firms and the public sector abstract this paper presents a model for assessing economic losses caused by electricity cuts as well as willingness to pay to avoid these power outages as an approximation to the value of supply security the economic effects for simulated power cuts from 1 to 48 h which take the affected provinces the day of the week and the time of day into consideration can be calculated using the assessment tool apostel the costs due to power cuts are computed separately for all sectors of the economy and for households the average value of lost load for austrian households and non household consumers in the case of a power cut of 1 h on a summer workday morning was calculated to be 17 1 per kwh of electricity not supplied

contingent valuation a practical alternative when prices aren t available a person may be willing to make an economic tradeoff to assure that a wilderness area or scenic resource is protected even if neither that person nor perhaps anyone else will actually visit this area this tradeoff is commonly labeled passive use value contingent valuation studies ask questions that help to reveal the monetary tradeoff each person would make concerning the value of goods or services such surveys are a practical alternative approach for eliciting the value of public goods including those with passive use considerations first i discuss the exxon valdez oil spill of march 1989 focusing on why it is important to measure monetary tradeoffs for goods where passive use considerations loom large although discussions of contingent valuation often focus on whether the method is sufficiently reliable for use in assessing natural resource damages in lawsuits it is important to remember that most estimates from contingent valuation studies are used in benefit cost assessments not natural resource damage assessments those working on benefit cost analysis have long recognized that goods and impacts that cannot be quantified are valued implicitly by giving them a limitless value when government regulations preclude certain activities or giving them a value of zero by leaving certain consequences out of the analysis contingent valuation offers a practical alternative for reducing the use of either of these extreme choices i put forward an affirmative case for contingent valuation and address a number of the concerns that have arisen

the evolution of price elasticity of electricity demand in south africa a kalman filter application abstract in south africa the electricity mismatch of supply and demand has been of major concern additional to past problems the 2008 electricity crisis made the solution crucial after its damaging consequences to the economy the disagreement on the need and consequences of the continuous electricity price hikes worsens the situation to contribute to the recent electricity debate this paper proposes a time varying price elasticity of demand for electricity the sensitivity of electricity consumption to price fluctuations changes throughout the years the main purpose of this study is the estimation of the price elasticity of electricity in south africa during the period 1980 2005 by employing an advanced econometric technique the kalman filter apart from the decreasing effect of electricity prices to consumption 71 8 in the 1990s and 94 5 in the 2000s in average our results conclude to an important finding the higher the prices for example in the 1980s the higher the sensitivity of consumers to price fluctuations thus further increases of the electricity prices may lead to changes in the behaviour of electricity consumers focusing their efforts on improving their efficiency levels by introducing demand side management techniques or even turning to other sources of cheaper energy

is the income elasticity of the willingness to pay for pollution control constant how willingness to pay for environmental quality changes as incomes rise is a central question in several areas of environmental economics this paper explores both theoretically and empirically whether or not the willingness to pay wtp for pollution control varies with income our model indicates that the income elasticity of the marginal wtp for pollution reduction is only constant under very restrictive conditions our empirical analysis tests the null hypothesis that the elasticity of the wtp for pollution control with respect to income is constant employing a multi country contingent valuation study of eutrophication reduction in the baltic sea our findings reject this hypothesis and estimate an income elasticity of the wtp for eutrophication control of 0 1 0 2 for low income respondents and 0 6 0 7 for high income respondents thus our empirical results suggest that the elasticity is not constant but is always less than one this has implications for how benefits transfer exercises and for theoretical explanations of the environmental kuznets curve

what s to know about hypothetical bias in stated preference valuation studies abstract hypothetical bias arises in stated preference valuation studies when respondents report a willingness to pay wtp that exceeds what they actually pay using their own money in laboratory or field experiments although this bias is not found in all stated preference surveys hypothetical wtp typically exceeds the actual value by a factor of two to three unfortunately there is no widely accepted general theory of respondent behaviour that explains hypothetical bias therefore two meta analyses are reviewed to test current hypotheses regarding the causes of this overstatement of wtp and the associated recommendations to mitigate the bias suggestions for future research are made including the development of a general theory

climate change hydro dependency and the african dam boom summary we examine africa s increasing reliance on hydropower in light of climate change induced variations in rainfall and the potential power outages that may result we use a continent wide riverflow model and ippc climate change scenarios and show that current plans for african dam building are fairly well matched with river flow predictions so that fears that international donors and national governments are making a series of expensive and environmentally damaging investments may be overstated however predictions of an increase in extreme events and reduced rainfall for certain countries mean there are still viability concerns for certain planned hydropower investments

households willingness to pay for safeguarding security of natural gas supply in electricity generation abstract security of energy supply is a major issue for all eu member states due to europe s increasing dependence on imported fossil fuel sources and the continuous rise in energy demand the latter is of particular importance in electricity sector given the continuously increasing use of gas for electricity generation in order to properly tackle with the problem concerted actions are required by the eu member states in several levels i e legislative political etc nevertheless these actions will come at an additional cost paid by the society either through increased electricity bills or through public financing for energy security investments thus such policies should be justified on the basis of cost benefit analysis towards this direction it may be necessary to take into account non market costs and benefits i e the value that consumers place on interruptions avoided in order to explore households perceptions and willingness to pay for securing gas supply for electricity production an empirical study was conducted by means of the contingent valuation method the results indicate that consumers are willing to pay a premium on their electricity bills in order to internalize the external costs of electricity production in terms of energy security which are caused from imported fuels

estimating the marginal cost of quality improvements the case of the uk electricity distribution companies the main aim of this paper is to develop an econometric approach to estimation of marginal costs of improving quality of service we implement this methodology by way of applying it to the case of the uk electricity distribution networks the estimated marginal costs allow us to shed light on the effectiveness of the current uk incentive regulation to improve quality and to derive optimal quality levels and welfare losses due to sub optimal quality levels the proposed method also allows us to measure the welfare effect of the observed quality improvements in the uk between 1995 and 2003 our results suggest that while the incentive schemes established by the regulator to encourage utilities to reduce network energy losses leads to improvement in sector performance they do not provide utilities with sufficient incentives to avoid power interruptions we find that the observed improvements in quality during the period of this study only represented 30 of the potential customer welfare gains and hence there was still significant scope for quality improvements

energy poverty in rural bangladesh energy poverty is a well established concept among energy and development specialists international development organizations frequently cite energy poverty alleviation as a necessary condition to reduce income poverty several approaches used to measure energy poverty over the past 20 years have defined the energy poverty line as the minimum quantity of physical energy needed to perform such basic tasks as cooking and lighting this paper uses a demand based approach to define the energy poverty line as the threshold point at which energy consumption begins to rise with increases in household income at or below this threshold point households consume a bare minimum level of energy and should be considered energy poor this approach was applied using cross sectional data from a comprehensive 2004 household survey representative of rural bangladesh the findings suggest that some 58 percent of rural households in bangladesh are energy poor versus 45 percent that are income poor the findings also suggest that policies to support rural electrification and greater use of improved biomass stoves might play a significant role in reducing energy poverty

improving electricity supply security in ghana the potential of renewable energy for decades ghana s economy has been fuelled by abundant inexpensive hydropower as a developing economy ghana s electricity demand has long been relatively low though rising in recent times due to increasing economic growth urbanization and industrial activities however the rapid demand growth as well as periodic hydrological shocks leaves the country increasingly reliant on expensive oil and gas based generation power plants with a resultant drain on the national economy the main electricity generation company the volta river authority is not able to generate enough electricity for all the demand sectors the electricity supply demand margins the difference between peak demand and available supply of the country fall short of the recommended engineering practice and thus presents a high supply security risk the country has been experiencing an increase in the frequency of power cuts over the last ten years it is clear that ghana will have to expand and diversify its generation capacity in order to improve supply security this paper provides a review of the assessed potential renewable energy resources their current exploitation status and their potential contribution to the electricity supply of the country the paper also presents the barriers to their utilization and the existing policy and regulatory instruments to overcome those barriers plus the current and expected future impacts of these instruments the results show that ghana has several res such as wind solar pv mini hydro and modern biomass that can be exploited for electricity production while their exploitation for electricity generation is currently very low providing just 0 13 of the country s generation the review shows a great potential for res generation to increase substantially over the next decade looking at the government commitment and legal frameworks that are being put in place

universal health insurance in the clinton plan coverage as a tax financed public good the financing arrangements embodied in the clinton health reform plan involve some important differences in the way in which public goods are usually financed the subsidies to small low wage firms mandated to provide benefits distort markets in both labor and products and offer incentives for the creation of small firms in addition the financing scheme implicitly envisions a head tax on families at modest income levels but offers a possible rationale for it nevertheless the main reason for many of the financing features appears to be an attempt to hold down the apparent budgetary cost of universal coverage

the value of continuous power supply for flemish households abstract this paper estimates the willingness to pay accept wtp wta of flemish households for continuous power supply based on a stated preference approach the data were collected via a choice experiment and were then used to estimate a main effects conditional logit model and a random parameter logit model with interaction effects and correlated preferences power outages are characterized by 6 attributes annual frequency duration peak or off peak announced or unannounced winter or summer and invoice impact all estimates have the expected sign the results are used to assess the marginal wtp wta for each of these attributes overall the outcome suggests that flemish households have heterogeneous preferences regarding power outage attributes and that due to a status quo bias only a relatively small share of them is willing to switch to a lower reliability level if this would be compensated by a bill discount

energy for sustainable development a case of developing countries abstract today there are 1 4 billion people around the world that lack access to electricity some 85 of them in rural areas without additional dedicated policies by 2030 the number of people drops but only to 1 2 billion some 15 of the world s population still lack access the majority of them living in sub saharan africa the number of people relying on the traditional use of biomass is projected to rise from 2 7 billion today to 2 8 billion in 2030 addressing these inequities depends upon international recognition that the projected situation is intolerable a commitment to effect the necessary change and setting targets and indicators to monitor progress a new financial institutional and technological framework is required as is capacity building in order to dramatically scale up access to modern energy services at the local and regional levels in this paper we discussed the energy situation of the developing countries for sustainable development

doctors with borders occupational licensing as an implicit barrier to high skill migration research on the political economy of immigration overlooks the specificity of human capital in skilled occupations and its implications for immigration preferences and policymaking conclusions that skilled americans are unconcerned about labor market competition from skilled migrants build on a simple dichotomy between high and low skill migrants in this article we show that natives turn to occupational licensing regulations as occupation specific protectionist barriers to skilled migrant labor competition in practice high skill natives face labor market competition only from those high skill migrants who share their occupation specific skills licensure regulations ostensibly serve the public interest by certifying competence but they can simultaneously be formidable barriers to entry by skilled migrants from a collective action perspective skilled natives can more easily secure sub national occupation specific policies than influence national immigration policy we exploit the unique structure of the american medical profession that allows us to distinguish between public interest and protectionist motives for migrant physician licensure regulations we show that over the 1973 2010 period states with greater physician control over licensure requirements imposed more stringent requirements for migrant physician licensure and as a consequence received fewer new migrant physicians by our estimates over a third of all us states could reduce their physician shortages by at least 10 percent within 5 years just by equalizing migrant and native licensure requirements this article advances research on the political economy of immigration and highlights an overlooked dimension of international economic integration regulatory rent seeking as a barrier to the cross national mobility of human capital and the public policy implications of such barriers

liberalising temporary movement of natural persons an agenda for the development round we discuss liberalising the temporary mobility of workers under mode 4 of the gats particularly the movement of medium and low skilled service providers between developing and developed countries such mobility potentially offers huge returns a flow equivalent to three per cent of developed countries skilled and unskilled work forces would generate an estimated increase in world welfare of over us 150 billion shared fairly equally between developing and developed countries the larger part of this emanates from the less skilled essentially because losing higher skilled workers cuts output in developing countries severely the mass migration of less skilled workers raises fears in developed countries for cultural identity problems of assimilation and the drain on the public purse these fears are hardly relevant to temporary movement however the biggest economic concern from temporary mobility is its competitive challenge to local less skilled workers but as populations age and the average levels of training and education rise developed countries will face an increasing scarcity of less skilled labour temporary mobility thus actually offers a strong communality of interest between developing and developed countries the remainder of the paper looks at the gats provisions on mode 4 and the commitments that have been made under it the paper reviews several official proposals for the doha talks including the very detailed one from india and considers several countries existing schemes for the temporary movement of foreign workers many countries have long had bilateral foreign worker programmes and some regional agreements provide for liberal and flexible movement these show what is feasible and how concerns can be overcome we caution that to be useful any wto agreement must increase mobility not just bureaucratise it the paper concludes with some modest and practical proposals we suggest inter alia that licensing firms to arrange the movement of labour is the most promising short term approach to increasing temporary mobility

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

willingness to pay for renewable energy evidence from a contingent valuation survey in kenya a modern form of energy in particular electricity for household use is an important vehicle in alleviating poverty in developing countries however access and costs of connecting to this service for most poor in these countries is inconceivable policies promoting electricity connection in rural areas are known to be beneficial in improving the socio economic and health well being for households this paper examines willingness to pay wtp for rural electrification connection in kisumu district kenya using the contingent valuation method cvm a nonparametric and a parametric model are employed to estimate wtp values for two electricity products grid electricity ge and photovoltaic pv electricity the results indicate that respondents are willing to pay more for ge services than pv and households favoured monthly connection payments over a lump sum amount some of the policies suggested in this paper include subsidizing the connection costs for both sources of electricity adjusting the payment periods and restructuring the market ownership of providing rural electricity services

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

consumer s surplus without apology the purpose of this paper is to settle the controversy surrounding consumer s surplus and by so doing to validate its use as a tool of welfare economics i will show that observed consumer s surplus can be rigorously utilized to estimate the unobservable compensating and equivalent variations the correct theoretical measures of the welfare impact of changes in prices and income on an individual i derive precise upper and lower bounds on the percentage errors of approximating the compensating and equivalent variations with consumer s surplus these bounds can be explicitly calculated from observable demand data and it is clear that in most applications the error of approximation will be very small in fact the error will often be overshadowed by the errors involved in estimating the demand curve the results in no way depend upon arguments about the constancy of the marginal utility of income consequently this paper supplies specific empirical criteria which can replace the apologetic caveats frequently employed by those who presently apply consumer s surplus moreover the results imply that consumer s surplus is usually a very good approximation to the appropriate welfare measures to preview below i establish the validity of these rules of thumb for a

an evaluation of monetary and non monetary techniques for assessing the importance of biodiversity and ecosystem services to people in countries with developing economies abstract biodiversity supports a range of ecosystems services that are of fundamental importance to people in poor countries economic valuation of biodiversity is important for the development of policies that protect biodiversity and alleviate poverty this paper provides an evaluation of monetary and non monetary techniques for assessing the value of biodiversity to people in least developed countries ldcs specifically research questions include 1 to what extent have monetary and non monetary techniques been used to assess the value of biodiversity and ecosystem services in ldcs 2 what are the key methodological practical epistemological and policy challenges to assessing the value of biodiversity and ecosystem services in ldcs 3 how can valuation methods be improved to allow more accurate valuation in ldcs

assessing energy supply security outage costs in private households abstract the objective of this paper is to contribute to the topic of energy supply security by proposing a monte carlo based and a survey based model to analyze the costs of power interruptions outage cost estimations are particularly important when deciding on investments to improve supply security e g additional transmission lines in order to compare costs to benefits but also other policy decisions on measures that have direct or indirect consequences for the supply security e g a phasing out of nuclear energy need to be based on results from outage cost estimations the main focus of this paper lies with residential consumers but the model is applied to commercial industrial and governmental consumers as well there are limited studies that have approached the problem of evaluating outage cost when comparing the results of these studies they often display a high degree of diversification as consumers have different needs and dependencies towards the supply of electricity because of varying circumstances and preferences a great diversity in outage cost is a logical consequence to take the high degree of uncertainties into account a monte carlo simulation was conducted in this study for the case of private households in germany

examining risk preferences under high monetary incentives experimental evidence from the people s republic of china several experimental sessions were conducted to elicit certainty equivalents for a sequence of lotteries involving real monetary outcomes the opportunity to conduct sessions in the people s republic of china afforded the ability to offer very large monetary incentives relative to subjects living costs in the highest payoff condition subjects earned three times their normal monthly revenue in the course of a two hour experiment results indicate a statistically significant impact of the level of monetary incentives on revealed risk preferences however even under extreme monetary incentives subjects demanded amounts well in excess of expected value for low probability gain prospects copyright 1992 by american economic association

the regulation of professional migration insights from the health and it sectors in asean this paper develops several indicators to measure the extent and depth of rules governing international migration it is set in the context of moves towards further liberalisation of services trade and associated labour mobility mode 4 under gats and related regional trading arrangements ten southeast asian countries at various stages of economic development are examined as a case study with special reference to health care and information technology these sectors are priority sectors for regional cooperation in services trade in asean but were expected to represent opposite extremes in terms of the regulation of migration the study finds that the more advanced countries tend to have more liberal regimes for international movements of skilled manpower although there were smaller differences regarding general visa and work permit arrangements generic restrictions on mobility were related to trade policies as well as to direct barriers often country specific to migration they included minimum salary requirement levies on foreign workers economic needs tests and limitations related to language education and job experience controls were more extensive in the health care sector related to social considerations as well as professional organisational interests

testing the internal consistency of contingent valuation surveys abstract for an internal consistency check one can examine wtp responses to different surveys holding an environmental problem constant concave preferences imply wtpconcavein the success of a remedy the same preferences imply wtpconvexin the magnitude of an environmental problem assuming a successful remedy having opposite signed curvature of these two wtp patterns is general not requiring concave preferences for an adding up test an environmental commodity can be divided then wtp for one part plus wtp for the second part conditional on already having the first part equals wtp for the whole adjusted by an income effect

willingness to pay and compensation demanded experimental evidence of an unexpected disparity in measures of value aside from possible income effects measures of the maximum amounts people will pay to avoid a loss and the minimum compensation necessary for them to accept it are generally assumed to be equivalent unexpectedly wide variations between these sums however have been noted in survey responses to hypothetical options this paper reports the results of a series of experiments that confronted people with actual money payments and cash compensations the results indicate that the compensation measure of value seems to exceed significantly the willingness to pay measure which would appear to call into some question various rules of entitlement damage assessments and interpretations of indifference curves

contingent valuation from dubious to hopeless abstract approximately 20 years ago peter diamond and i wrote an article for this journal analyzing contingent valuation methods at that time peter s view was that contingent valuation was hopele

a new meta analysis on the wtp wta disparity abstract this study reports a new meta analysis of papers that elicit willingness to pay wtp and willingness to accept compensation wta measures of value for the same good we investigate the effects of type of good and several survey design features on the wtp wta disparity measured as the logarithm of the ratio of mean wta to mean wtp confirming horowitz and mcconnell s 2002 pioneering meta analysis we find the disparity is smaller for ordinary private goods than for public and non market goods that it is not solely an artifact of using hypothetical transactions or other weak experimental or survey methods and that it is smaller for studies using student subjects in addition we find that the disparity is smaller when subjects have experience valuing the good in real markets or through repeated experimental trials in contrast to horowitz and mcconnell we find the disparity is significantly smaller in studies using incentive compatible elicitation mechanisms the disparity is smaller in more recent studies an effect that is attributable only in part to changes in study characteristics

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