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

Authors

1 Faculty of Management and Economics, Shahid Bahonar University of Kerman, Kerman, Iran

2 Faculty of Management and Economics, Iran University of Science &Technology, Tehran, Iran

Abstract

Nowadays, due to lack of energy generation in power systems, load shedding in residual sector is inevitable. This report aims to analyze the willingness to pay (WTP) of residual consumers in city of Kerman, in Iran to prevent power outages. For this purpose, 800 households were surveyed, applying a one-and-one-half-bound dichotomous choice (OOHB-DC) survey, combined with a spike model to deal with zero WTP responses, during May 2021. In designed questionnaire, respondents were clearly informed about the subject and gave meaningful answers. In addition, particle swarm optimization (PSO) algorithm has been implemented for parameter estimation of model. The results show that the average monthly WTP of households of Kerman is 92886 Rials (USD 0.37) and the annual value is 972 billion Rials (USD 0.66 million). Calculated parameters and mean WTP were statistically significant. The results indicate a substantial amount of investments should be made by power suppliers to prevent power outages in the residential sector.

Keywords

Iranian Economic Review

Articles in Press, Accepted Manuscript
Available Online from 03 September 2023

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