Choice experiment study on the willingness to pay to improve

Access to reliable electricity is important in increasing the living standards of households and promoting sustainable development. However, Ghanaian households have had to grapple with frequent power outages and poor quality electricity services in recent times. This study examines the factors influencing households' willingness to pay for reliable electricity services in Ghana.

The paper estimates households’ willingness to pay (WTP) for improved supply of electricity in Tamale Urban and Peri-Urban Communities. A contingent valuation method (CVM) was used to determine the stated WTP amount and its determinants. The results from the CVM indicate that households are willing to pay an additional amount of Ghȼ0.2232 (US$0.0698) for 1kWh of improved electricity. From the double-logarithmic econometric model results, education, residential ownership status, age of household head, household size, household’s monthly income, monthly blackout duration and monthly electricity bill are factors that significantly influence the WTP amount for uninterrupted supply of electricity. It is therefore important for the electricity service providers in the study area to improve their services and increase the electricity tariff by Ghȼ0.2232 (US$0.0698) per kWh since domestic customers are willing to pay such amount for quality services. Private organisations which have the capacity to provide reliable supply of electricity should capitalise on the poor services provided by Volta River Authority of Northern Electricity Department Corporation (VRA-NEDCo) and supply reliable electricity so as to enjoy the higher tariff that households are willing to pay. Also, it is recommended that social intervention programmes which aim at increasing the level of household incomes should be implemented to help them increase their WTP amount.

British Journal of Economics, Management & Trade, 2014

This work was carried out in collaboration between both authors. Author AOA originated and designed the study, performed most of the statistical analysis and wrote the first draft of the manuscript as part of his Msc. Project under the supervision of author GKB. Author GKB restructured the work for a journal article under the present title, beef up the literature review section and the concluding analysis/recommendation. Both author read and approve the final manuscript including analysis and manuscript.

International Journal of Energy Economics and Policy, 2015

The paper investigates the households' preference for electricity service reliability. Using a contingent valuation survey; we elicit Beninese urban households' willingness to pay (WTP) to avoid power outages. In the study respondents are asked to state their WTP for avoiding six different unplanned outages. We therefore apply a random parameter Tobit model on a temporal panel data since there is cross-sectional heterogeneity and a proportion of zero responses. Based on the estimations, we find that the preference for electricity service reliability among household is higher during night time and weekend days and depends positively on the duration of the outages. These results tend to validate the thesis that households preference for electricity service reliability strongly depends on leisure time.

Forman journal of economic studies, 2022

The study's objective is to investigate the willingness of consumers to pay for alternate fuel sources, such as fixed charge electricity connections, in the Neelum district of Azad Jammu and Kashmir, Pakistan. The data was collected through a survey using questionnaires from four villages in the Neelum district in 2018. Questionnaires were collected from three hundred and fifteen household representatives, out of which two hundred and twenty-five questionnaires were selected. Thirty questionnaires were excluded as household representatives were not permanently residing in the area. Neelum district of Azad Jammu and Kashmir is blessed with natural resources such as forest, water, minerals, etc. Households generally use wood as a fuel source. Using exploratory analysis and a binary logistic model, the study revealed that consumers with higher income and expenditure on fuel are more inclined to pay for fixed charged electricity connections. Furthermore, households with a high level of education were also ready to pay for fixed charged electricity connections. We also concluded that old and young consumers have almost the same preferences. Government should initiate awareness campaigns to educate residents about the conservation and protection of the forest.

Journal of economics and sustainable development, 2016

As in most developing countries, many attempts have been made and are continuously made to in Kenya to reduce dependence of forests as a source of energy through introduction of bans on logging and campaigns to households to shift to cleaner energy sources. Attempts through rural electrification program as envisaged in the energy policy of Kenya have been geared towards expanding clean energy access to previously unconnected sections of the population. Yet the majority households in urban areas as exemplified by Nakuru municipality residents of Kenya continue to depend on semi-clean fuels as primary source of energy. Using survey data from 300 randomly selected households in Nakuru Municipality, we sought to empirically determine the factors that influence household choice of clean domestic energy. A Multinomial logit model results showed that household’s choice between clean and semi-clean fuels was influenced by Socio-economic and demographic factors, and government energy policie...

JENRR, 2022

This paper investigates the odd ratio of selecting clean verses unclean source of energy as the main household fuel choice in urban areas using logistic functions through modelling of a binary dependent variable. Also, the research examines the important determinants of household fuel choice in urban Kenya. The data was obtained from KIPPRA's data set on patterns of fuel use in Kenya. The study analysis was informed by energy ladder hypothesis and consumer behavior theory as the theoretical framework. Multinomial logistic estimation model was used to investigate the choices households make and patterns of cooking fuels in urban areas. From regression results income of household, cost of fuel and socioeconomic factors were identified as the main factors explaining house fuel choice decisions. To accelerate use of clean residential fuel, the policymakers and government must carry out public education campaign, and ensure the accessibility and affordability of these fuels in urban areas to avoid harmful effects such as pollution and health problems fuelled by kerosene and biomass.

Mediterranean Journal of Social Sciences

This paper reports results of a study that aimed at analysing the energy choice behaviour of people in South Lunzu Township in Malawi. A Microeconometric approach was adopted on survey data collected by way of a questionnaire. Results of Multinomial logit model suggest that most socioeconomic variables under study were inelastic in influencing the probability for the outcomes to be used for purposes of cooking at the household level. Statistically, Age, income, and education of head of household together with household size were important factors influencing the choice of outcomes electricity, charcoal, firewood and LP gas for cooking purposes. The major recommendation of this study is that campaigns emphasising on the abilities of Renewable Energy be developed and disseminated. Also, an emphasis on Liquefied Petroleum Gas for purposes of cooking must be encouraged. These policies would ensure sustainable development by reducing reliance on biomass which is depleting at a faster rate than regeneration.

SSRN Electronic Journal, 2000

Series is a forum for stimulating discussion and eliciting feedback on ongoing and recently completed research and policy studies undertaken by the Asian Development Bank (ADB) staff, consultants, or resource persons. The series deals with key economic and development problems, particularly those facing the Asia and Pacific region; as well as conceptual, analytical, or methodological issues relating to project/program economic analysis, and statistical data and measurement. The series aims to enhance the knowledge on Asia's development and policy challenges; strengthen analytical rigor and quality of ADB's country partnership strategies, and its subregional and country operations; and improve the quality and availability of statistical data and development indicators for monitoring development effectiveness.

Compared to urban areas, a satellite picture of rural areas at night is distressing. Bright lights are few and far between yet in the face of the Strategic National Energy Plan, Sustainable Energy for All Action Plan, the Ghana Energy Development and Access Project and Energy Sector Strategy and Development Plan is the energy sector vision which advocates for accessible energy for all households in Ghana. This paper investigates the factors that influence households’ choice of modern electricity in the West Mampurisi District of Ghana using a household survey data. Multi-stage sampling procedure was used to obtain 295 households for the study. The underlying empirical model was estimated using the Probit model. Contrary to widely held beliefs, the results of the Probit model revealed that cattle ownership which is a proxy for wealth/income is not a key determinant of household energy connectivity. Significant and positive variables included tenancy type, radio, TV and fridge ownership, perception about electricity, duration and cost of use of electricity. Government can support the development of alternative energy sources such as renewable energy or promote the entry of multiple players into the generation market to reduce the cost of supplying utility power to the rural communities, thus enabling affordability by every household. Key words: Connectivity, modern electricity, Probit model, Ghana