The effect of financial compensation on the acceptance of power lines: Evidence from a randomized discrete choice experiment in Germany

Michael Simora

No 729, Ruhr Economic Papers from RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen

Abstract: Despite general support for the transition towards renewable energies, local opposition may hamper the required power line construction. This paper evaluates a large randomized one shot binary choice experiment with about 10,000 observations to examine the effect of annual community compensations based on current legislation as well as the effect of household compensations on the willingness to accept new power line construction. Results reveal that community compensations have no bearing on the acceptance level, whereas personal compensations have a negative effect via crowding out intrinsic motivation to support the construction project or via signaling negative impacts for residents. Thus, policy makers should refrain from financial payments as an instrument to decrease local opposition.

Keywords: not-in-my-backyard; compensation payment; willingness to accept; motivation crowding out (search for similar items in EconPapers)
JEL-codes: C93 M52 Q40 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-dcm, nep-ene and nep-exp
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:rwirep:729

DOI: 10.4419/86788849

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