Consumer Willingness to Pay for Attributes of Alternative Energy Sources in Pakistan

Abstract

Consistent and inexpensive energy access is pivotal for human development and sustainable living standard. Pakistan is facing a huge gap in the demand and supply of energy which is brewing since 2007. This study analysed the factor influencing the households’ willingness to pay for the alternative energy source. Using a world bank data, collected from 8500 households our study presented the findings of the ordered logit model. Our results indicate that there exists a positive willingness to pay for energy alternatives for socio-economic characteristics and energy attributes. Besides, it indicates the affordability and cost-saving factor of potential alternative significantly influence the WTP for the alternative energy source. We suggested the policymakers to make policies to encourage the invention of the affordable energy products that result in reliable and long-running energy alternatives. Similarly, the financial assistance in the form of easily accessible loans, subsidies, and attractive instalments for the energy products.