Italian Consumers' Willingness to Pay for Renewable Energy Sources

Renewable and Sustainable Energy Reviews, Vol. 34 (June 2014), pp. 110-121. DOI information: 10.1016/j.rser.2014.03.002

USAEE Working Paper No. 11-094

29 Pages Posted: 13 Nov 2011 Last revised: 10 Jul 2014

See all articles by Simona Bigerna

Simona Bigerna

University of Perugia - Department of Economics; Department of Economics, University of Perugia

Paolo Polinori

University of Perugia - Department of Economics

Date Written: November 12, 2011

Abstract

It is well known that EU Directive 2009/72/CE imposes to the European Countries environmental and energy targets. The Italian goal is to attain a 17% share in electricity production from renewable sources by 2020. To make investment in renewables attractive, market prices must be profitable and the gap between the private and social costs of renewables must be filled using “persuasive” tools. Obviously, the acceptance of such a burden may be controversial because it results in an increase in prices. In this context, it becomes crucial to explore the consistency of consumer’s willingness to pay (WTP) for electricity production from RES. This study is based on a national survey conducted in November 2007 in Italy. We used a stochastic payment card (SPC) including a “certainty correction” and proposing five degrees of acceptance: definitely yes and no, probably yes and no and “do not know.” An empirical analysis shows that, even by the most conservative estimates, there is a substantial willingness among Italian consumers to partially cover the cost of achieving the RES goal.

Keywords: contingent valuation, interval data, stochastic payment card, renewable energy sources.

JEL Classification: Q26, Q41

Suggested Citation

Bigerna, Simona and Polinori, Paolo, Italian Consumers' Willingness to Pay for Renewable Energy Sources (November 12, 2011). Renewable and Sustainable Energy Reviews, Vol. 34 (June 2014), pp. 110-121. DOI information: 10.1016/j.rser.2014.03.002; USAEE Working Paper No. 11-094 . Available at SSRN: https://ssrn.com/abstract=1958691 or http://dx.doi.org/10.2139/ssrn.1958691

Simona Bigerna

University of Perugia - Department of Economics ( email )

via Pascoli, 20
PG 06123 Perugia, 06123
Italy

Department of Economics, University of Perugia ( email )

Perugia
Italy

Paolo Polinori (Contact Author)

University of Perugia - Department of Economics ( email )

via A. Pascoli, 20
Perugia, Perugia 06123
Italy
+39 075 5855002 (Phone)
+39 075 5855299 (Fax)

HOME PAGE: http://www.ec.unipg.it/DEFS/polinori.html

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