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Electricity outages in Ghana: Are contingent valuation estimates valid?

Electricity outages in Ghana: Are contingent valuation estimates valid?
Electricity outages in Ghana: Are contingent valuation estimates valid?

African countries experience persistent and serious energy outages, but while multiple valuation studies provide estimates of the costs of electricity outages in high-income countries, evidence is scarce for lower- and middle-income countries. The few studies that assess the value of reliable energy supply rely on the contingent valuation method that is under wide scrutiny. This paper aims to provide new estimates of households' willingness to pay to reduce electricity outages for Ghana and contributes to the debate on the validity of contingent valuation results for energy reliability. Our results suggest that households are willing to pay GHS 67 ($17) per month for reliable electricity supply, equivalent to 7% of respondents’ income. The results of tests for hypothetical bias, WTP-WTA disparity and income effects suggest that the contingent valuation estimates from this study are robust and can support decision makers in prioritizing energy policies and investments.

Contingent valuation, Electricity supply, Ghana, Hypothetical bias, Validity, WTA-WTP gap
0301-4215
Amoah, Anthony
b7eef5fe-56d6-43d0-8dd0-139c0ae144b6
Ferrini, Silvia
47165331-b907-4aa6-a606-fd3fb412ff76
Schaafsma, Marije
937ac629-0fa2-4a11-bdf7-c3688405467d
Amoah, Anthony
b7eef5fe-56d6-43d0-8dd0-139c0ae144b6
Ferrini, Silvia
47165331-b907-4aa6-a606-fd3fb412ff76
Schaafsma, Marije
937ac629-0fa2-4a11-bdf7-c3688405467d

Amoah, Anthony, Ferrini, Silvia and Schaafsma, Marije (2019) Electricity outages in Ghana: Are contingent valuation estimates valid? Energy Policy, 135, [110996]. (doi:10.1016/j.enpol.2019.110996).

Record type: Article

Abstract

African countries experience persistent and serious energy outages, but while multiple valuation studies provide estimates of the costs of electricity outages in high-income countries, evidence is scarce for lower- and middle-income countries. The few studies that assess the value of reliable energy supply rely on the contingent valuation method that is under wide scrutiny. This paper aims to provide new estimates of households' willingness to pay to reduce electricity outages for Ghana and contributes to the debate on the validity of contingent valuation results for energy reliability. Our results suggest that households are willing to pay GHS 67 ($17) per month for reliable electricity supply, equivalent to 7% of respondents’ income. The results of tests for hypothetical bias, WTP-WTA disparity and income effects suggest that the contingent valuation estimates from this study are robust and can support decision makers in prioritizing energy policies and investments.

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WTP_electricity_30_July_2019_presubmission - Accepted Manuscript
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More information

Accepted/In Press date: 14 September 2019
e-pub ahead of print date: 10 October 2019
Published date: 1 December 2019
Keywords: Contingent valuation, Electricity supply, Ghana, Hypothetical bias, Validity, WTA-WTP gap

Identifiers

Local EPrints ID: 435323
URI: http://eprints.soton.ac.uk/id/eprint/435323
ISSN: 0301-4215
PURE UUID: 09ee0bc5-bff2-46fd-9533-e8316e69445a
ORCID for Marije Schaafsma: ORCID iD orcid.org/0000-0003-0878-069X

Catalogue record

Date deposited: 30 Oct 2019 17:30
Last modified: 10 Oct 2020 04:01

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