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This paper aims to report on homebuyers’ preferences and willingness to pay for installed home photovoltaic systems. Their influence on the market position of a dwelling…
This paper aims to report on homebuyers’ preferences and willingness to pay for installed home photovoltaic systems. Their influence on the market position of a dwelling is relatively unknown. Considering that expected lifespan of photovoltaic systems is at least 25 years, it is likely that many dwellings with a photovoltaic system will enter the housing market.
Few houses with installed photovoltaic systems have been sold in the market to date. Lack of real market data imposes a method based on the stated preference data. Therefore, the general preferences toward photovoltaic systems are determined by a discrete choice model based on responses of 227 homebuyers in the Eindhoven region, The Netherlands. Further, the model estimates were used to assess the indirect willingness to pay for home photovoltaic systems. This initial willingness to pay is further reassessed with the direct willingness to pay collected in an open-ended questionnaire format.
Results of the model show that the homebuyers’ preferences for home photovoltaic systems are large and significant. In addition to general preferences, this article reports on the taste heterogeneity carried out by separating observations based on the respondents’ characteristics. For example, photovoltaic systems are more appealing to homebuyers in more urban or central neighbourhoods. Further, the results of the direct survey lead to the conclusion that people are probably willing to pay close to the replacement value of the system and only 22 per cent of all respondents did not want to pay anything for the installed photovoltaic system.
These findings are exploratory and they raise a number of questions for further investigations, such as those regarding the real estate value of the installed photovoltaic systems. The reported findings must be regarded as local, thus further research is necessary to understand the impact on European housing markets.
Preferences and willingness to pay for home photovoltaic systems can provide a variety of economic, social and political recommendations to different interested parties such as homeowners, buyers, realtors, retailers, energy companies and governments. For instance, a homeowner would like to know what would be the effect of a photovoltaic system on the housing market.
As per the knowledge of authors, this is the first paper to estimate the impact of an installed photovoltaic system on housing choice, measured by stated choice data in the local housing market. It expands the existing body of knowledge for increasingly important issues of valuing and measuring preferences for photovoltaic systems installed on dwellings.
This paper proposes a methodology for incorporating psychometric data such as stated preferences and subjective ratings of service attributes in econometric consumer's…
This paper proposes a methodology for incorporating psychometric data such as stated preferences and subjective ratings of service attributes in econometric consumer's discrete choice models. Econometric formulation of the general framework of the methodology is presented, followed by two practical submodels. The first submodel combines revealed preference (RP) and stated preference (SP) data to estimate discrete choice models. The second submodel combines a linear structural equation model with a discrete choice model to incorporate latent attributes into the choice model using attitudinal data as their indicators. Empirical case studies on travel mode choice analysis demonstrate the effectiveness and practicality of the methodology.
Advances in Econometrics is a series of research annuals first published in 1982 by JAI Press. In this paper, we present a brief history of the series over its first 30…
Advances in Econometrics is a series of research annuals first published in 1982 by JAI Press. In this paper, we present a brief history of the series over its first 30 years. We describe key events in the history of the volume, and give information about the key contributors: editors, editorial board members, Advances in Econometrics Fellows, and authors who have contributed to the great success of the series.
This paper discusses the influence of human sociality on choice behavior, through association with social networks and the influence of these networks on constraints…
This paper discusses the influence of human sociality on choice behavior, through association with social networks and the influence of these networks on constraints, perceptions, preferences, and decision-making processes. The paper discusses ways to incorporate these factors into choice models, while retaining the aspects of the theory of individual rationality that are predictive. Finally, the paper outlines an econometric method for solving the “reflection problem” of determining whether social affiliations follow preferences, or preferences follow social affiliations, by distinguishing opportunity-based and preference-based motivations for association with social networks.