Japanese Consumers' WTP for the Source of Electricity after the Great East Japan Earthquake

Author Name MORITA Tamaki  (Yamanashi Prefectural University) /MANAGI Shunsuke  (Faculty Fellow, RIETI)
Creation Date/NO. September 2013 13-J-066
Research Project Economic Analysis of Environmental, Energy, and Resource Strategies Following the Great East Japan Earthquake
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The Great East Japan Earthquake on March 11, 2011 severely damaged the Fukushima Daiichi Nuclear Power Plant, and has reminded people of the potential risk of electricity supply shortage. Japanese consumers have since also began rethinking about the source of electricity production.

This paper presents the results of both discrete choice experiments and choice probabilities experiments to determine the citizens' willingness to pay (WTP) for residential electricity produced by natural gas, solar, wind, and nuclear, to evaluate the three energy mix scenarios presented by the government. The authors also measured the effects of the positive or negative information on nuclear energy. The results show that Japanese consumers on average have negative WTP for electricity produced by nuclear power regardless of the information they read, and that their WTP for energy mix changes is far less than price increases already planned by electric companies without any prospects on actual changes in their energy mix.