Willingness to Pay for Improved Electricity Supply in Ghana

Daniel Kwabena Twerefou

Department of Economic, University of Ghana, Accra, Ghana.

DOI: 10.4236/me.2014.55046                

Abstract

One major problem facing Ghana is the unreliable supply of electricity. Unreliable electricity supply largely attributed to supply side constraints such as poor energy infrastructure, low tariffs which is below cost recovery and increasing demand has made it difficult to provide uninterrupted supply for the populace. Currently, there is a constant outcry by Ghanaians for the government and service providers to improve electricity service delivery due to the fact that households do suffer economic losses in the event of unannounced power outages to the point that many of them may be willing to pay higher tariffs if that will ensure improved service delivery. In this study we assess households’ willingness to pay (WTP) for improved electricity supply as well as the factors that influence WTP through a contingent valuation survey. Results from our analysis indicated that, households in Ghana are prepared to pay on the average about ￠0.2734 for a kilowatt-hour which is about one and a half times more than what they are paying currently. An econometric analysis of the factors that influence households’ WTP for improved electricity supply indicates that household income, sex, household size, secondary and tertiary level education are the significant factors.

Keywords

Contingency Valuation Method, Willingness to Pay, Improved Electricity Supply

Conflicts of Interest

The authors declare no conflicts of interest.

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