The influence of home-site factors on residents' willingness to pay: An application for power generation from scrubland in Galicia, Spain

The main objective of this paper is to measure how much home-site factors can help to explain the individual WTP for an environmental improvement in power generation in Galicia, Spain. The results show that home-site variables such as a dispersed population, local community income, population growth and coastal/inland emplacements have significant effects on the residents' WTP. Individual and home-site models are compared using goodness-of-fit measures, and implications for forestry resources management and energy planning are discussed. The results favor to take into account the home-site variables into the WTP function. Moreover, a different structure of preferences for coastal and inland inhabitants is identified. A cross-validity analysis shows that some home-site coefficients are common to both sub-samples, but the scale parameters are not homogenous. This analysis could be useful to inform and support the public energy policy when designing incentives that promote the electric use of biomass. (C) 2009 Elsevier Ltd. All rights reserved.