umu.sePublications
Change search
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf
Accounting for elimination-by-aspects strategies and demand management in electricity contract choice
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Economics. Umeå University, Faculty of Social Sciences, Centre for Environmental and Resource Economics (CERE).ORCID iD: 0000-0003-4061-3701
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Economics. Umeå University, Faculty of Social Sciences, Centre for Environmental and Resource Economics (CERE).
2018 (English)In: Energy Economics, ISSN 0140-9883, E-ISSN 1873-6181, Vol. 73, p. 80-90Article in journal (Refereed) Published
Abstract [en]

In this paper, we report on a discrete choice experiment aimed at eliciting Swedish households' willingness-to-accept a compensation for restrictions on household electricity and heating use during peak hours. When analyzing data from discrete choice experiments it is typically assumed that people make rational utility maximizing decisions, i.e., that they consider all of the attribute information and compare all alternatives. However, mounting evidence shows that people use a wide range of simplifying strategies that are inconsistent with utility maximization. We use a flexible model capturing a two-stage decision process. In the first stage, respondents are allowed to eliminate from their choice set alternatives that contain an unacceptable level, in this case restrictions on the use of heating and electricity. In the second stage, respondents choose in a compensatory manner between the remaining alternatives. Our results show that about half of the respondents choose according to an elimination-by-aspects strategy, and that, on average, they are unwilling to accept any restrictions on heating in the evening or electricity use irrespective of time-of-day. Furthermore, considering elimination-by-aspects behavior leads to a downward shift in elicited willingness-to-accept. We discuss implications for policy.

Place, publisher, year, edition, pages
Elsevier, 2018. Vol. 73, p. 80-90
Keywords [en]
Choice experiment, Electricity contract, Willingness-to-accept, Household electricity use, Elimination-by-aspects, Two-stage decision
National Category
Economics
Identifiers
URN: urn:nbn:se:umu:diva-155146DOI: 10.1016/j.eneco.2018.05.009ISI: 000438000600006Scopus ID: 2-s2.0-85047459958OAI: oai:DiVA.org:umu-155146DiVA, id: diva2:1317743
Available from: 2019-05-23 Created: 2019-05-23 Last updated: 2020-03-07Bibliographically approved
In thesis
1. Towards sustainable energy consumption: Electricity demand flexibility and household fuel choice
Open this publication in new window or tab >>Towards sustainable energy consumption: Electricity demand flexibility and household fuel choice
2020 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

Paper [I] investigates household heterogeneity in valuing electricity contract attributes that include various load controls and information sharing to induce demand flexibility. Using a stated preference choice experiment conducted with Swedish households, this paper shows that, although a large proportion of households ask for substantial compensation, some households are willing to share their electricity consumption information and require relatively lower compensation to allow load controls. In addition, this paper finds that some households that are willing to provide flexibility by accepting load controls at a relatively low compensation ask for sizable compensation to share their electricity consumption information, and vice versa. From the perspective of the contract providers,

Paper [II] uses a flexible model to accommodate heterogeneous decision rules in analysing data obtained from a discrete choice experiment aimed at eliciting Swedish households’ willingness to accept compensation for restrictions on household electricity and heating use during peak hours. The model combines behavioural processes based on random utility maximization with an elimination-by-aspects strategy, where the latter involves a two-stage decision process. In the first stage, respondents are allowed to eliminate from their choice set alternatives that contain an unacceptable level, in this case restrictions on the use of heating and electricity. In the second stage, respondents choose between the remaining alternatives in a rational utility maximizing manner. Our results show that about half of the respondents choose according to an elimination-by-aspects strategy, and considering elimination-by-aspects behaviour leads to a downward shift in elicited willingness-to-accept.

Paper [III] tests the effect of a pro-environmental framing on households’ stated willingness to accept restrictions on their electricity use. We use a split-sample choice experiment and ask respondents to choose between their current electricity contract and hypothetical contracts featuring various load controls and monetary compensation. Our results indicate that the pro-environmental framing has little impact on the respondents’ choices. We observe a significant framing effect on choices and marginal willingness-to-accept for only a few contract attributes. The results further suggest that there is no significant framing effect among households that are already engaged in pro-environmental activities.

Paper [IV] explores the socio-demographic and housing characteristics that influence household fuel choice and fuel use decisions in urban Ethiopia. The results indicate that, whereas households with a female head are more likely to combine traditional solid (firewood and charcoal) and modern (electricity) fuels for different uses, households with less-educated heads, many family members, and poor living conditions (fewer rooms) tend to use traditional solid biomass fuels. We find that households with an individual electricity meter are significantly less likely to use charcoal. Further, the results show the satiation effect of the increasing use of a fuel by households is relatively higher for firewood and lower for electricity.

Place, publisher, year, edition, pages
Umeå: Umeå Universitet, 2020. p. 22
Series
Umeå economic studies, ISSN 0348-1018 ; 971
Keywords
Choice experiment, demand flexibility, electricity contract, fuel choice, fuel stacking, household heterogeneity, load control, pro-environmental framing, willingness-to-accept
National Category
Economics
Identifiers
urn:nbn:se:umu:diva-168726 (URN)978-91-7855-238-2 (ISBN)978-91-7855-239-9 (ISBN)
Public defence
2020-04-03, Triple Helix, Universitetsledningshuset, Umeå, 10:00 (English)
Opponent
Supervisors
Note

The room for the public defence have changed, from sal 213H Samhällsvetarhuset to Triple Helix Universitetsledningshuset.

Available from: 2020-03-13 Created: 2020-03-07 Last updated: 2020-04-03Bibliographically approved

Open Access in DiVA

No full text in DiVA

Other links

Publisher's full textScopus

Authority records BETA

Daniel, Aemiro MelkamuPersson, Lars

Search in DiVA

By author/editor
Daniel, Aemiro MelkamuPersson, Lars
By organisation
EconomicsCentre for Environmental and Resource Economics (CERE)
In the same journal
Energy Economics
Economics

Search outside of DiVA

GoogleGoogle Scholar

doi
urn-nbn

Altmetric score

doi
urn-nbn
Total: 149 hits
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf