An OOHB-DC Survey for Estimating Willingness to Pay of Residual Consumers to Avoid Power Outage by Using PSO

Document Type : Research Paper

Authors

1 Department of Management and Economics, Bahonar University of Kerman, Kerman, Iran.

2 Southern Kerman Electricity Distribution Company, Kerman, Iran.

3 Golgohar Mining and Industrial Company, Sirjan, Iran.

10.22059/ier.2025.342281.1007441

Abstract

In the face of insufficient energy production in power systems, load shedding in residential areas has become unavoidable. This study evaluates the willingness to pay (WTP) among households in Kerman, Iran, to prevent power outages. A survey of 800 households was conducted in May 2021 using a one-and-one-half-bound dichotomous choice (OOHB-DC) approach, integrated with a spike model to address zero WTP responses. The questionnaire was designed to clearly communicate the study’s purpose, ensuring meaningful responses. Particle swarm optimization (PSO) was employed to estimate model parameters. Findings indicate that the average monthly WTP per household is 92,886 Rials (USD 0.37), with an annual aggregate value of 972 billion Rials (USD 3.89 million). These results, which are statistically significant, suggest that substantial investments are needed by utility providers to maintain reliable power supply in residential areas.
 

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Main Subjects

References

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Iranian Economic Review
Volume 29, Issue 2
June 2025
Pages 674-688

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