Characteristics of UK Consumers' Willingness to Pay for Green Energy

Business Strategy and the Environment, Vol. 20, No. 7, pp. 456-470

Published as: Diaz-Rainey, I, Ashton, J., PROFILING POTENTIAL GREEN ELECTRICITY TARIFF ADOPTERS: GREEN CONSUMERISM AS AN ENVIRONMENTAL POLICY TOOL?, 2011

Posted: 18 Nov 2007 Last revised: 12 May 2014

See all articles by Ivan Diaz-Rainey

Ivan Diaz-Rainey

Department of Accounting, Finance and Economics, Griffith Business School, Griffith University; University of Otago

John Kevin Ashton

Bangor Business School; University of East Anglia (UEA)

Date Written: November 1, 2007

Abstract

Using a national survey of the UK population this paper explores demographic, attitudinal and behavioural characteristics of UK consumers who have stated a willingness to pay a premium for green energy. Using a number of ordered probit models it is found that willing consumers tend to have higher income, are better informed with respect to energy matters, show concern for the environment and believe individual actions can make a difference to environmental decay. More generally, attitudinal variables provide the greatest explanatory power, while behavioural variables performed poorly. These results are consistent with the findings of recent North American studies and represent an addition to previous research on the subject in the UK. It is concluded that, if policy makers and utility marketeers want a role for consumers in funding new renewable investment, individuals need to be persuaded that, not only action is necessary, but also that others are partaking and that this critical mass is making a difference.

Keywords: willingness to pay, renewables, green marketing, energy policy

JEL Classification: L94, Q42, Q48, Q20

Suggested Citation

Diaz-Rainey, Ivan and Ashton, John Kevin, Characteristics of UK Consumers' Willingness to Pay for Green Energy (November 1, 2007). Business Strategy and the Environment, Vol. 20, No. 7, pp. 456-470 , Published as: Diaz-Rainey, I, Ashton, J., PROFILING POTENTIAL GREEN ELECTRICITY TARIFF ADOPTERS: GREEN CONSUMERISM AS AN ENVIRONMENTAL POLICY TOOL?, 2011, Available at SSRN: https://ssrn.com/abstract=1030530

Ivan Diaz-Rainey (Contact Author)

Department of Accounting, Finance and Economics, Griffith Business School, Griffith University ( email )

Australia

University of Otago ( email )

Dunedin
New Zealand

John Kevin Ashton

Bangor Business School ( email )

Bangor Business School
College Road
Gwynedd LL57 2DG, Wales LL57 2DG
United Kingdom

University of East Anglia (UEA) ( email )

Norwich Research Park
Norwich, Norfolk NR4 7TJ
United Kingdom

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