Willingness to Pay for Energy Efficient Appliances: The Case of Lebanese Consumers

Hassan Harajli,Ali Chalak

doi:10.3390/su11205572

Abstract

A contingent valuation study was conducted to elicit the willingness to pay (WTP) of Lebanese citizens for five types of energy-efficient home appliances: washing machines, air conditioners, televisions, light bulbs, and refrigerators. A face-to-face survey is designed to this end, with data collection achieving a sample of 605 households geographically representative of the Lebanese population. A multivariate Tobit model was used to gauge the effects of socio-demographic characteristics, attitudes, perceptions, behavior, and experience on the WTP across all these appliances, while accounting for potential correlations between these WTP values. Findings provide evidence of the importance of several socio–demographics in determining WTP for more energy efficient appliances, such as income, education, and age, and the importance of perceptions and experience covariates, not least the implementation of energy labelling and the cost of electricity. In terms of policy implications, this study highlights the need to legally enforce a shift in payment mode from renting per capacity (kW) to purchasing per power (kWh) consumed for electricity in the back-up power sector, and the immediate introduction of a local labelling scheme for home appliances.

Highlights

Energy efficiency is regarded as one of the more effective means of alleviating energy demand and facilitating the transition towards a low carbon future [1]
It is worth mentioning here that comparatively, the APBE model generally fares better in explanatory power than the SD model. This is attested by the higher log-likelihood and lower Akaike Information Criterion (AIC) of the APBE model; the only exception to this picture is the Bayesian Information Criterion (BIC), which penalizes the number of model parameters to a larger extent than the AIC
The BIC for the APBE is only slightly larger than for the SD model. This higher performance of the APBE is partly explained by the fact that it is based on a larger number of estimated parameters, and by the fact that attitudes, perceptions, behavioral patterns, and experiences related to energy-efficient appliances are more proximate determinants of willingness to pay (WTP) for energy-efficient appliances

Summary

Introduction

Energy efficiency is regarded as one of the more effective means of alleviating energy demand and facilitating the transition towards a low carbon future [1]. Understanding and targeting the behavior of citizens governing private household energy consumption and conservation is critical for meeting energy efficiency targets [5,6]. This is a challenging task, not least in view of the ‘Energy Efficiency Gap’. Insights from behavioral economics suggest that people’s knowledge, values, attitudes, and intentions deviate substantially from the neo-classical economic axioms of rational choice and utility maximization [6,8,9,10,11,12] This gap has led some researchers to appeal for the inclusion of ‘behavioral capital’ as a key component to drive forward sustainable development goals [13]

Methods

Results

Conclusion