The main objective of this study was to find out whether households are willing to pay for improved electricity supply in Ghana: Cape coast Metropolis. The study adopted survey research and emphasized the Contingency Valuation Method. Theoretical and empirical literature relevant to the study was reviewed. The research work also employed primary data where 200 household heads were sampled and they were the main respondents for the study.
The analysis of the data was made possible by the use of SPSS and STATA software packages. Also, the logit regression model was used in assessing the significance of the explanatory variables in relation to Willingness to Pay which is the dependent variable in this study. Findings from the study showed that out of the 200 respondents interviewed, 174 respondents representing 87 percent are willing to pay for the improvement in electricity supply, while the remaining 26 respondents representing 13 percent specified that they are not willing to pay for the improvement in electricity supply. In addition, factors such as the households income, marital status, education, alternative power source and household size of consumers are important variables that significantly affect Willingness to Pay (WTP) in this study.
Table of Contents
1. CHAPTER ONE
1.1 INTRODUCTION
1.2 BACKGROUND TO THE STUDY
1.3 PROBLEM STATEMENTS
1.4 OBJECTIVES OF THE STUDY
1.5 STATEMENT OF HYPOTHESIS
1.6 JUSTIFICATION OF THE STUDY
1.7 SCOPE OF THE STUDY
1.8 ORGANIZATION OF THE STUDY
2. CHAPTER TWO
2.1 LITERATURE REVIEW
2.2 INTRODUCTION
2.3 THEORETICAL REVIEW
2.4 NON MARKET VALUATION
2.5 METHODS FOR NON MARKET VALUATION
2.6 BRIEF HISTORY OF CONTINGENT VALUATION METHOD (CVM)
2.7 BIASES IN CONTINGENCY VALUATION METHOD (CVM)
2.8 WILLINGNESS TO PAY (WTP) AND WILLINGNESS TO ACCEPT (WTA)
2.9 EMPIRICAL REVIEW OF CONTINGENCY VALUATION METHOD.
2.10 SUMMARY OF CHAPTER
3. CHAPTER THREE
3.1 METHODOLOGY
3.2 INTRODUCTION
3.3 DESCRIPTION OF THE STUDY AREA
3.4 RESEARCH DESIGN
3.5 SOURCE AND TYPE OF DATA
3.6 SAMPLING TECHNIQUES
3.7 RESEARCH INSTRUMENTS AND DATA COLLECTION PROCEDURE
3.8 DATA ANALYSIS
3.9 THEORETICAL FRAMEWORK
3.10 EMPIRICAL MODEL
3.11 DESCRIPTION OF EXPLANATORY VARIABLES
3.12 WHY THE USE OF THE LOGIT REGRESSION MODEL
3.13 ERRORS IN MEASUREMENT
4. CHAPTER FOUR
4.1 RESULTS AND DISCUSSION
4.2 INTRODUCTION
4.3 DESCRIPTIVE PRESENTATION OF DATA
4.4 ANALYSIS ON WILLINGNESS TO PAY
4.5 DISCUSSION OF THE LOGISTIC REGRESSION OUTPUT
4.6 CONCLUSION
5. CHAPTER FIVE
5.1 SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.2 INTRODUCTION
5.3 SUMMARY
5.4 CONCLUSION
5.5 POLICY RECOMMENDATIONS
5.6 LIMITATIONS OF THE STUDY
5.7 DIRECTION FOR FUTURE STUDIES
Objectives and Research Themes
The primary objective of this study is to determine whether households in the Cape Coast Metropolis are willing to pay for improved, reliable electricity supply, and to identify the socio-economic factors that influence this willingness to pay (WTP).
- Application of the Contingent Valuation Method (CVM) to elicit household preferences.
- Economic analysis of the cost of frequent and unannounced power outages.
- Assessment of socio-economic variables such as income, education, and household size on WTP.
- Evaluation of the impact of alternative power sources on the demand for reliable electricity.
- Econometric modeling using the Logit regression approach to determine significant predictors of WTP.
Excerpt from the Book
Background to the study
Access to electricity is important in improving the living standards of households in developing countries. It is also crucial in enabling the countries themselves to advance economically by facilitating production. According to Louw, Conradie, Howells and Dekenah (2008), reliable Electricity services allow households to meet their daily requirements of cooking, learning and entertainment. Access to quality public services including electricity is also inextricably linked to the Millennium Development Goals (World Bank, 2003). Cape Verde in the Atlantic Ocean, North Cyprus in the Mediterranean, and several islands in the Caribbean, such as the Dominican Republic, live with almost daily blackouts (World Bank, 2006; Clough, 2008). Often, the reason behind these frequent and long-lasting blackouts is a lack of investment in electricity generation, transmission and distribution systems. Similar studies in this area have been conducted in more advanced countries such as Sweden, Belgium among others (Carlsson and Martinson, 2004; Pepermans, 2011). These studies revealed that households are willing to pay significant amounts of electricity to avoid power outages and willing to accept significant amounts of electricity for at least one additional outage of power in a year.
Summary of Chapters
CHAPTER ONE: This introductory chapter outlines the research context, the problem statement regarding unreliable electricity, the study objectives, and the research hypotheses.
CHAPTER TWO: This chapter reviews theoretical and empirical literature on electricity demand, pricing, non-market valuation, and the application of the Contingent Valuation Method.
CHAPTER THREE: This chapter details the research methodology, including the study area description, survey design, data collection instruments, and the Logit regression model used.
CHAPTER FOUR: This chapter presents the results of the field survey, including descriptive statistics and the analysis of the logistic regression output regarding WTP factors.
CHAPTER FIVE: This concluding chapter summarizes the study findings, draws conclusions, and provides policy recommendations for improving electricity services and increasing revenue generation.
Keywords
Willingness to Pay, WTP, Electricity Supply, Contingent Valuation Method, CVM, Cape Coast Metropolis, Logit Regression, Infrastructure, Power Outages, Economic Valuation, Socio-economic factors, Utility, Energy Policy, Reliability, Household Income.
Frequently Asked Questions
What is the core focus of this research?
The research focuses on estimating the willingness of households in the Cape Coast Metropolis to pay for improved and reliable electricity supply to avoid frequent and unannounced power outages.
What are the primary thematic areas?
The themes include electricity demand analysis, non-market valuation, identification of demographic drivers of consumer behavior, and the socio-economic impacts of unreliable power infrastructure.
What is the central research question?
The primary research question is: To what extent are households in the Cape Coast Metropolis willing to pay for improved electricity, and which factors significantly influence this decision?
Which scientific method is utilized?
The study adopts survey research using the Contingent Valuation Method (CVM). Data is analyzed through descriptive statistics and a binary Logit regression model to identify significant explanatory variables.
What topics are discussed in the main body?
The main body covers a comprehensive literature review, the methodological framework, presentation of demographic data, analysis of household outage experiences, and the results of the logistic regression regarding WTP.
Which keywords characterize this work?
Key terms include Willingness to Pay (WTP), Contingent Valuation Method (CVM), power outages, electricity supply, household income, and utility.
How does household size affect the willingness to pay?
The study found a negative relationship between household size and WTP, indicating that as the number of individuals in a household increases, the stated willingness to pay for improved electricity decreases.
What role does education play in this study?
Education is a significant factor in determining WTP. Households with heads possessing higher levels of education showed a stronger willingness to pay for improved electricity supply compared to those with lower levels of education.
How did alternative power sources impact the results?
The study identified that households already utilizing alternative power sources, such as rechargeable lamps or solar energy, were less likely to pay for improvements in the national grid, as they have already invested in substitutes.
- Quote paper
- Michael Tutu Boadu (Author), 2016, Case Study in the Cape Coast Metropolis. Are households willing to pay for improved electricity supply?, Munich, GRIN Verlag, https://www.grin.com/document/494455
