Willingness to Pay for The Reliable and Uninterrupted Electricity Supply in District Nowshera

Abstract

Electricity has played an important role in everyday life for thousands of years and its importance is increasing day by day due to new inventions and advancements in technologies. Therefore, it is crucial for the economic development of any country. Not only in industrial productivity but also in daily life mandatory tasks are stopped due to regular interruption in the electricity supply from the power providers. The objectives of this study are to determine all those factors that influence a household’s willingness to pay additional charges for improved electricity service and also analyze the impact of affected household’s various activities including sports, religious and cultural activities due to frequent outages on its willingness to pay additional to get improved electricity service. This primary data was collected through the contingent valuation method from 285 households. The study applied binary logistic regression estimation. The results concluded that the education level of the household, household size, monthly income of the household, monthly electricity bill, and reliability of service play a significant effect on consumers’ willingness to pay additional charges to get satisfactory electricity service. The study also reveals that various household activities have no impact on their willingness to pay an additional amount for improved electricity service.