Estimating the willingness to pay for a reliable electricity supply in the Turkish Republic of Northern Cyprus

[摘要] This dissertation estimates households’ willingness to pay (WTP) for an improved electricity service in North Cyprus. Stated WTP is estimated using choice experiments (CE), contingent valuation methods (CVM), and approximated using the averting expenditure (AE) method. These estimates rely on data collected from 350 in-person interviews conducted during the period August 5-22, 2008. Using the Tobit model, an average household’s averting expenditures are estimated to be 3.13 YTL/month. In the CVM section, the spike model with varying spike, varying mean, and constant standard error specification results in a median WTP of 23.03 YTL per month and a mean WTP of 29.14 YTL per month. Using CE, compensating variation estimates for eliminating summer and winter outages are calculated using parameter estimates from the mixed logit (ML) model with interactions. The compensating variation is 6.65 YTL per month and 25.83 YTL per month respectively. Among the three valuation methodologies, WTP per hour unserved ranges from 0.13 YTL (0.11 USD) to 1.22 YTL (1.03 USD). In order to avoid the cost of outages, households are willing to incur a 1.5%-13.5% increase in their monthly electricity bill.

[发布机构] University:University of Birmingham;Department:Birmingham Business School, Department of Economics

[关键词] H Social Sciences;HB Economic Theory