The monetary value of convenience and environmental features in residential heat energy consumption, in particular its social determinants

Abstract

Environmental and comfort value of renewable energy sources is a less studied area. The article introduce the economic value of these characteristics, related to social determinants. The data basis is representative of the Hungarian population above 18 years of age, by gender, age and level of education. Our model estimation was developed by hybrid choice context in latent class modelling. In addition to the usual WTP (willingness to pay) calculation, we also used WTI (willingness to invest) calculations. The results show that the value of environmentally-friendly nature in Hungary exceeds the convenience factor. The latter cannot be significantly detected for the majority of the Hungarian population. This statement is supported by results for both fuels and boilers. Our findings show the strong attachment of the Hungarian average person to the use of firewood and natural gas, which are very typical in Hungarian heat consumption. Regarding socially selected consumer groups, strong correlation can be observed between social capital supply, income level, access to information and environmental awareness in Hungary. Regarding policy implications, our results in development of clusters may be useful for the establishment of a selective support policy and two clearly identifiable groups should be highlighted in the energy policy.

Keywords

• Energy price
• Convenience
• Hybrid choice
• Consumer group
• Social characteristics