Publication: How Valuable is the Reliability of Residential Electricity Supply in Low-Income Countries? Evidence from Nepal
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2020-06
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2020-07-06
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This study uses a contingent valuation approach to value the willingness-to-pay (WTP) for improved service experienced by households in Nepal following the end of the country's load-shedding crisis of 2008-2016. Using a detailed survey of grid-connected Nepali households, the authors calculate the WTP per outage-day avoided and the residential value of lost (VoLL) and analyze their key drivers. Households are willing to pay, on average, 123.32 NR ($1.11) per month, or 65 percent of the actual average monthly bill for improved quality of power supply. The preferred estimates of the VoLL are in the range of 5 to 15 NR/kWh (¢4.7-¢14/kWh). These estimates are below the marginal cost of avoided load shedding, and virtually the same as valuations at the beginning of the load-shedding crisis.
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“Alberini, Anna; Steinbuks, Jevgenijs; Timilsina, Govinda. 2020. How Valuable is the Reliability of Residential Electricity Supply in Low-Income Countries? Evidence from Nepal. Policy Research Working Paper;No. 9311. © World Bank. http://hdl.handle.net/10986/34026 License: CC BY 3.0 IGO.”
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