Households' Perceived Value of Electrical Service Reliability: An Analysis of Contingent Valuation Data

The Energy Journal, 1988

Posted: 19 Nov 2008

See all articles by Michael J. Doane

Michael J. Doane

Competition Economics LLC

Raymond S. Hartman

Greylock McKinnon Associates

chang ki Woo

affiliation not provided to SSRN

Date Written: 1988

Abstract

Energy analysts are often faced with the need to determine the value of electric service reliability in the absence of an explicit market for this service feature. One method for indirectly measuring consumers' valuation is called "contingent valuation" (CV). In service reliability applications, this approach involves the use of customer surveys in which respondents are asked hypothetical questions about how much they would be willing to pay (WTP) to avoid a power outage, or conversely, how much ompensation they would be willing to accept (WTA) to incur an additional outage. Typical outage conditions are defined by such attributes as frequency, season and time-of-day of occurrence, and duration, important aspects that directly influence resource planning and ratemaking.

Suggested Citation

Doane, Michael J. and Hartman, Raymond S. and Woo, chang ki, Households' Perceived Value of Electrical Service Reliability: An Analysis of Contingent Valuation Data (1988). The Energy Journal, 1988, Available at SSRN: https://ssrn.com/abstract=1303608

Michael J. Doane (Contact Author)

Competition Economics LLC ( email )

2000 Powell Street
Suite 510
Emeryville, CA 94608
United States
510-655-7503 (Phone)

Raymond S. Hartman

Greylock McKinnon Associates ( email )

75 Park Plaza
4th Floor
Boston, MA 02116
United States

Chang ki Woo

affiliation not provided to SSRN

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