||Economic Valuation of Electrical Service Reliability for Households’ in Developing Country: A Censored Random Coefficient Model Approach
ALINSATO ALASTAIRE SENA ,
||International Journal of Energy Economics and Policy
||The paper investigates the households’ preference for electricity service reliability.
Using a contingent valuation survey; we elicit Beninese urban households’ willingness to pay (WTP)
to avoid power outages. In the study respondents are asked to state their WTP for avoiding six
different unplanned outages. We therefore apply a random parameter Tobit model on a temporal panel
data since there is cross-sectional heterogeneity and a proportion of zero responses. Based on the
estimations, we find that the preference for electricity service reliability among household is higher
during night time and weekend days and depends positively on the duration of the outages. These
results tend to validate the thesis that households preference for electricity service reliability strongly
depends on leisure time.
||Outage, Multivariate censoring; Random coefficients; stated preferences; willingness to pay
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