Supplier choice and WTP for electricity attributes in an emerging market: The role of perceived past experience, environmental concern and energy saving behavior

A-Tier
Journal: Energy Economics
Year: 2013
Volume: 40
Issue: C
Pages: 953-966

Score contribution per author:

1.341 = (α=2.01 / 3 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

This study analyzes customers' preferences and their willingness to pay (WTP) for certain service attributes in an electricity supplier choice context. Specifically, a stated preference choice experiment is conducted in the Canary Islands' residential market where limited competition exists. Preferences for different electricity suppliers and three level-of-service attributes are investigated, namely, supply reliability, share of renewable energies and availability of a complementary energy audit service. The results might be interpreted as an indication of different aspects new firms need to consider if they plan to enter in the market. There is an opportunity for new companies to establish in the market, though evidence of brand loyalty to the current company and/or significant switching costs are also found, especially in the case of older people. Regarding the estimated WTP, several results should be highlighted. First, customers who have experienced more serious outages in the past tend to show a higher WTP to reduce the outage frequency. Second, highly-educated respondents, those who state a great concern for the greenhouse gases (GHG) emissions and those who carry out energy saving actions in their homes exhibit a larger WTP for renewable energies. This empirical evidence provides useful information for authorities responsible for energy policy design.

Technical Details

RePEc Handle
repec:eee:eneeco:v:40:y:2013:i:c:p:953-966
Journal Field
Energy
Author Count
3
Added to Database
2026-01-24