Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/45322 
Year of Publication: 
2010
Series/Report no.: 
Ruhr Economic Papers No. 233
Publisher: 
Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI), Essen
Abstract: 
With its commitment to double the share of renewable fuels in electricity generation to at least 30% by 2020, the German government has embarked on a potentially costly policy course whose public support remains an open empirical question. Building on household survey data, in this paper we trace peoples' willingness-to-pay (WTP) for various fuel mixes in electricity generation, and capture preference heterogeneity among respondents using random parameter techniques. Based on our estimates, we trace out the locus that links the premia charged for specific electricity mixes with the fraction of people supporting the policy. Albeit people's WTP for a certain fuel mix in electricity generation is positively correlated to the renewable fuel share, our results imply that the current surcharge effectively exhausts the financial scope for subsidizing renewable fuels.
Subjects: 
green electricity
willingness-to-pay
preference heterogeneity
policy evaluation
JEL: 
C23
H23
Q48
ISBN: 
978-3-86788-265-1
Document Type: 
Working Paper

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