How Spatial Relationships Influence Economic Preferences for Wind Power—A Review
Date
2015-06-23
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Publisher
MDPI AG
Abstract
An increasing number of studies in the environmental and resource economic
literature suggest that preferences for changes or improvements in environmental amenities,
from water quality to recreation, are spatially heterogeneous. One of these effects in particular,
distance decay, suggests that respondents exhibit a higher willingness to pay (WTP) the
closer they live to a proposed environmental improvement and vice versa. The importance
of spatial effects cannot be underestimated. Several of these studies find significant biases
in aggregate WTP values, and therefore social welfare, from models that disregard spatial
factors. This relationship between spatial aspects and preferences, however, remains largely
ignored in the non-market valuation literature applied to valuing preferences for renewable
energy, generally, and wind power, specifically. To our knowledge, fourteen peer-reviewed
studies have been conducted to estimate stated preferences (SP) for onshore and/or offshore
wind development, yet less than half of those utilize any measure to account for the
relationship between spatial effects and preferences. Fewer still undertake more robust
measures that account for these spatially dependent relationships, such as via GIS, outside
incorporating a single ‘distance’ attribute within the choice experiment (CE) referenda. This
paper first reviews the methodologies of the SP wind valuation studies that have integrated
measure(s) to account for spatial effects. We then categorize these effects into three
dimensions—distance to a proposed wind project, distance to existing wind project(s), and
cumulative effects—supporting each with a discussion of significant findings, including those found in the wind hedonic and acceptance literature. Policy implications that can be
leveraged to maximize social welfare when siting future wind projects as well as
recommendations for additional research to control for preference spatial heterogeneity in
wind CEs are also posited.
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Citation
Energies 2015, 8, 6177-6201; doi:10.3390/en8066177