A mechanism to derive more truthful willingness to accept values for renewable energy systems
This paper examines and compares households’ willingness to accept (WTA)/willingness to pay (WTP) ratio for solar power equipment on their premises through both a novel experimental approach and conventional techniques. The experimental approach was administered by using a Becker-DeGroot-Marschak me...
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Elsevier
2018-01-01
|
| Series: | Heliyon |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S2405844017311738 |
| Summary: | This paper examines and compares households’ willingness to accept (WTA)/willingness to pay (WTP) ratio for solar power equipment on their premises through both a novel experimental approach and conventional techniques. The experimental approach was administered by using a Becker-DeGroot-Marschak method and cheap talk, with open-ended questions of WTA/WTP. The results were quite striking. The ratio for the incentivised approach was 1.08:1; whereas for the conventional approach it was 3.5:1. The findings suggest that the hypothesis that WTP equals WTA cannot be rejected for the incentivised mechanism, and it appears to control for the individual’s strategic behaviour bias as a treatment against over-estimating WTA and under-estimating WTP. The findings also provide some policy implications for Northern Cyprus: the government can set lower financial incentives to increase the solar power installed capacity on the island. |
|---|---|
| ISSN: | 2405-8440 |