Public values on offshore wind farm

Abstract

The purpose of this study is twofold: (1) to examine households’ willingness to pay for preserving offshore natural beauty from the construction of wind farm as an alternative nonrenewable energy and (2) to analyze the effect on the economic value of a public good resulting from the change in order of information. We employ parametric method with logistic distribution and distribution-free Turnbull estimator to a dichotomous choice contingent valuation survey to elicit economic value of preserving offshore area in Nantucket Sound, Massachusetts. Using Turnbull estimator, the economic values of public good in question, as measured by expected lower bound willingness to pay (WTP) and willingness to accept (WTA), are estimated to be $56.74 and $89.44 per year, respectively. However, the censored logistic regression, which depends on the assumed logistic distribution, produced median WTP and WTA of very small values $0.08 and $0.09. Regarding the survey treatment, we find no significant effect of the order of information on WTP/WTA responses.