On the construct validity of measures of willingness to pay for green electricity: Evidence from a South African case

A. Chan, L.A.G. Oerlemans, J. Volschenk

Research output: Contribution to journalArticleScientificpeer-review

Abstract

The price consumers are willing to pay (WTP) extra for green electricity (GE) is one of the uncertainties possibly impacting on the overall feasibility of its market introduction. In the literature, several measurements of WTP are used. However, the number of studies comparing WTP measures is limited. This study investigates the construct validity (convergent and theoretical) of two widely used WTP measures (double-bounded dichotomous choice (DC) and open-ended (OE)). A model informed by the well-known theory of planned behaviour was applied to survey data from 890 South African domestic energy users. It was found that convergent validity among the WTP measures was fairly low. Moreover, results from Tobit regressions showed that a grounded theoretical model yields statistically significant results. However, different independent variables emerge in the DC and OE models. Therefore, the theoretical validity of one of the WTP measures seems to be low. The paper proposes a number of explanations for the low construct validity observed.
Keywords: Green electricity, Willingness to pay, Construct validity, South Africa
Original languageEnglish
Pages (from-to)321-328
JournalApplied Energy
Volume160
DOIs
Publication statusPublished - 2015

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title = "On the construct validity of measures of willingness to pay for green electricity: Evidence from a South African case",
abstract = "The price consumers are willing to pay (WTP) extra for green electricity (GE) is one of the uncertainties possibly impacting on the overall feasibility of its market introduction. In the literature, several measurements of WTP are used. However, the number of studies comparing WTP measures is limited. This study investigates the construct validity (convergent and theoretical) of two widely used WTP measures (double-bounded dichotomous choice (DC) and open-ended (OE)). A model informed by the well-known theory of planned behaviour was applied to survey data from 890 South African domestic energy users. It was found that convergent validity among the WTP measures was fairly low. Moreover, results from Tobit regressions showed that a grounded theoretical model yields statistically significant results. However, different independent variables emerge in the DC and OE models. Therefore, the theoretical validity of one of the WTP measures seems to be low. The paper proposes a number of explanations for the low construct validity observed.Keywords: Green electricity, Willingness to pay, Construct validity, South Africa",
author = "A. Chan and L.A.G. Oerlemans and J. Volschenk",
year = "2015",
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On the construct validity of measures of willingness to pay for green electricity : Evidence from a South African case. / Chan, A.; Oerlemans, L.A.G.; Volschenk, J.

In: Applied Energy , Vol. 160, 2015, p. 321-328.

Research output: Contribution to journalArticleScientificpeer-review

TY - JOUR

T1 - On the construct validity of measures of willingness to pay for green electricity

T2 - Evidence from a South African case

AU - Chan, A.

AU - Oerlemans, L.A.G.

AU - Volschenk, J.

PY - 2015

Y1 - 2015

N2 - The price consumers are willing to pay (WTP) extra for green electricity (GE) is one of the uncertainties possibly impacting on the overall feasibility of its market introduction. In the literature, several measurements of WTP are used. However, the number of studies comparing WTP measures is limited. This study investigates the construct validity (convergent and theoretical) of two widely used WTP measures (double-bounded dichotomous choice (DC) and open-ended (OE)). A model informed by the well-known theory of planned behaviour was applied to survey data from 890 South African domestic energy users. It was found that convergent validity among the WTP measures was fairly low. Moreover, results from Tobit regressions showed that a grounded theoretical model yields statistically significant results. However, different independent variables emerge in the DC and OE models. Therefore, the theoretical validity of one of the WTP measures seems to be low. The paper proposes a number of explanations for the low construct validity observed.Keywords: Green electricity, Willingness to pay, Construct validity, South Africa

AB - The price consumers are willing to pay (WTP) extra for green electricity (GE) is one of the uncertainties possibly impacting on the overall feasibility of its market introduction. In the literature, several measurements of WTP are used. However, the number of studies comparing WTP measures is limited. This study investigates the construct validity (convergent and theoretical) of two widely used WTP measures (double-bounded dichotomous choice (DC) and open-ended (OE)). A model informed by the well-known theory of planned behaviour was applied to survey data from 890 South African domestic energy users. It was found that convergent validity among the WTP measures was fairly low. Moreover, results from Tobit regressions showed that a grounded theoretical model yields statistically significant results. However, different independent variables emerge in the DC and OE models. Therefore, the theoretical validity of one of the WTP measures seems to be low. The paper proposes a number of explanations for the low construct validity observed.Keywords: Green electricity, Willingness to pay, Construct validity, South Africa

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DO - 10.1016/j.apenergy.2015.09.068

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EP - 328

JO - Applied Energy

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SN - 0306-2619

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