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An Experimental Study on the Gap between Willingness to Pay and Willingness to Donate for Green Electricity

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We experimentally investigate the gap between willingness to pay and willingness to donate in the context of the promotion of green electricity. The experiment involves two differing scenarios (public choice versus individual choice) and two distinct public payment vehicles (direct tax versus indirect tax). Our main result is that subjects' WTP significantly exceeds WTD, by a factor of three. Regression analysis shows that our results remain robust when controlling for personal characteristics and attitudes. We conclude from our results that our subjects perceived the promotion of environmental quality as a public duty rather than an individual task.
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Keywords: FREE-RIDING; GREEN ELECTRICITY; IMPURE ALTRUISM; WILLINGNESS TO DONATE; WILLINGNESS TO PAY

Document Type: Research Article

Publication date: 01 September 2009

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  • As one of the world's oldest professional journals in public finance, founded in 1884, FinanzArchiv (FA) publishes original work from all fields of public economics which are of interest to an international readership, e.g. taxation, public debt, public goods, public choice, federalism, market failure, social policy, and the welfare state. Special emphasis is on high-quality theoretical and empirical papers on current policy issues.

    FA is a peer-reviewed journal commited to a prompt turnaround of submissions.

    FA is listed in the Social Science Citation Index (SSCI), in Current Contents/Social and Behavioral Sciences, in Econ Lit, in the Journal of Economic Literature, in IDEAS and RePEc and in the International Bibliography of the Social Sciences.

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