Nexus between willingness to pay for renewable energy sources: evidence from Turkey
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RESEARCH ARTICLE
Nexus between willingness to pay for renewable energy sources: evidence from Turkey Iftikhar Muhammad 1 & Malik Shahzad Shabbir 2 & Sharjeel Saleem 3 & Kanwal Bilal 4 & Recep Ulucak 5 Received: 8 March 2020 / Accepted: 5 August 2020 # Springer-Verlag GmbH Germany, part of Springer Nature 2020
Abstract The willingness to pay (WTP) plays a central role in directing appropriate policy regarding ambitious renewable energy targets. Based on this discrepancy, this study intends to investigate the willingness to pay (WTP) for Turkish citizens regarding green electricity by using a one-way analysis of variance (one-way ANOVA). The interviews were conducted comprising 2500 households in 12 major metropolitan cities of Turkey, which is based on the contingent valuation method and consists of 26 questions. The results indicate that for a 20% share of renewable energy, middle-income groups are willing to pay higher than lower and upper-income groups. Moreover, highly environmentally conscious people tend to pay more for a 20% share of green energy. On the other hand, high-income groups and old age groups indicated a positive and high willingness to pay for a 30% share of renewable energy (RE) sources. In addition, primary school and undergraduate educational groups recorded highly significant results for willingness to pay. The results also indicate that Turkish citizens are willing to pay 9.25 Turkish liras (TL) per month for a 20% share and 4.77 Turkish liras per month for a 30% share of renewable energy in total energy production. Keywords Renewable energy . Willingness to pay . CV method . One-way ANOVA . Turkey JEL Classifcation E14 . D52
Introduction Responsible Editor: Nicholas Apergis * Malik Shahzad Shabbir [email protected] Iftikhar Muhammad [email protected] Sharjeel Saleem [email protected] Kanwal Bilal [email protected] Recep Ulucak [email protected] 1
Ibn Haldun University, Istanbul, Turkey
2
University of Lahore, Lahore, Pakistan
3
Lyallpur Business School, GC University, Faisalabad, Pakistan
4
Comsats University Islamabad, Lahore Campus, Lahore, Pakistan
5
Faculty of Economics and Administrative Sciences, Department of Economics, Erciyes University, Kayseri, Turkey
Human energy needs have increased dramatically in tandem with technological change and economic development in recent years. Also, economic growth has become largely dependent on energy. The world energy system is focused largely on non-renewable energy sources (coal, oil, and natural gas), leading to more than 80% of the world economy’s overall energy supply (IEA 2016). Nonetheless, several significant problems have arisen in recent years, associated with the use of non-renewable energy sources such as the rising gap in the demand and supply of energy worldwide (Nematollahi et al. 2016), the growing threat of oil reserve depletion (Bettini and Lazaros 2013), and an increase in the greenhouse gas (GHG) emissions in the atmosphere (LPR 2014). The carbon emitted from the con
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