Valuing the Reliability of the Electrical Power Infrastructure

A Two-stage Hedonic Approach

Paul Maliszewski, Elisabeth Larson, Charles Perrings

Research output: Contribution to journalArticle

Abstract

The reliability of electrical power supply is amongst the conditions that inform house purchase decisions in all urban areas. Reliability depends in part on the conditions of the power generation and distribution infrastructures involved, and in part on environmental conditions. Its value to homeowners may be capitalised into the value of the house. In this paper, a hedonic pricing approach is used to estimate the capitalised value of the reliability offered by distribution infrastructures and the environmental conditions with which they interact in Phoenix, Arizona. A first stage estimates the impact of infrastructure and environmental conditions on reliability. In a second stage, the capitalised value of reliability from the marginal willingness to pay for reliability revealed by house purchase decisions is estimated and used to infer the value of both infrastructural characteristics and environmental conditions.

Original languageEnglish (US)
Pages (from-to)72-87
Number of pages16
JournalUrban Studies
Volume50
Issue number1
DOIs
StatePublished - Jan 2013

Fingerprint

electrical power
environmental conditions
infrastructure
environmental factors
Values
purchase
homeowner
willingness to pay
power generation
urban area
pricing
supply
decision
distribution

ASJC Scopus subject areas

  • Environmental Science (miscellaneous)
  • Urban Studies

Cite this

Valuing the Reliability of the Electrical Power Infrastructure : A Two-stage Hedonic Approach. / Maliszewski, Paul; Larson, Elisabeth; Perrings, Charles.

In: Urban Studies, Vol. 50, No. 1, 01.2013, p. 72-87.

Research output: Contribution to journalArticle

@article{b22429c0e2e64dc89d7b8aa59ec4aae0,
title = "Valuing the Reliability of the Electrical Power Infrastructure: A Two-stage Hedonic Approach",
abstract = "The reliability of electrical power supply is amongst the conditions that inform house purchase decisions in all urban areas. Reliability depends in part on the conditions of the power generation and distribution infrastructures involved, and in part on environmental conditions. Its value to homeowners may be capitalised into the value of the house. In this paper, a hedonic pricing approach is used to estimate the capitalised value of the reliability offered by distribution infrastructures and the environmental conditions with which they interact in Phoenix, Arizona. A first stage estimates the impact of infrastructure and environmental conditions on reliability. In a second stage, the capitalised value of reliability from the marginal willingness to pay for reliability revealed by house purchase decisions is estimated and used to infer the value of both infrastructural characteristics and environmental conditions.",
author = "Paul Maliszewski and Elisabeth Larson and Charles Perrings",
year = "2013",
month = "1",
doi = "10.1177/0042098012450482",
language = "English (US)",
volume = "50",
pages = "72--87",
journal = "Urban Studies",
issn = "0042-0980",
publisher = "SAGE Publications Ltd",
number = "1",

}

TY - JOUR

T1 - Valuing the Reliability of the Electrical Power Infrastructure

T2 - A Two-stage Hedonic Approach

AU - Maliszewski, Paul

AU - Larson, Elisabeth

AU - Perrings, Charles

PY - 2013/1

Y1 - 2013/1

N2 - The reliability of electrical power supply is amongst the conditions that inform house purchase decisions in all urban areas. Reliability depends in part on the conditions of the power generation and distribution infrastructures involved, and in part on environmental conditions. Its value to homeowners may be capitalised into the value of the house. In this paper, a hedonic pricing approach is used to estimate the capitalised value of the reliability offered by distribution infrastructures and the environmental conditions with which they interact in Phoenix, Arizona. A first stage estimates the impact of infrastructure and environmental conditions on reliability. In a second stage, the capitalised value of reliability from the marginal willingness to pay for reliability revealed by house purchase decisions is estimated and used to infer the value of both infrastructural characteristics and environmental conditions.

AB - The reliability of electrical power supply is amongst the conditions that inform house purchase decisions in all urban areas. Reliability depends in part on the conditions of the power generation and distribution infrastructures involved, and in part on environmental conditions. Its value to homeowners may be capitalised into the value of the house. In this paper, a hedonic pricing approach is used to estimate the capitalised value of the reliability offered by distribution infrastructures and the environmental conditions with which they interact in Phoenix, Arizona. A first stage estimates the impact of infrastructure and environmental conditions on reliability. In a second stage, the capitalised value of reliability from the marginal willingness to pay for reliability revealed by house purchase decisions is estimated and used to infer the value of both infrastructural characteristics and environmental conditions.

UR - http://www.scopus.com/inward/record.url?scp=84871376202&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=84871376202&partnerID=8YFLogxK

U2 - 10.1177/0042098012450482

DO - 10.1177/0042098012450482

M3 - Article

VL - 50

SP - 72

EP - 87

JO - Urban Studies

JF - Urban Studies

SN - 0042-0980

IS - 1

ER -