Residential outage cost estimation: Hong Kong

C. K. Woo; T. Ho; A. Shiu; Y. S. Cheng; I. Horowitz; J. Wang

doi:10.1016/j.enpol.2014.05.002

Residential outage cost estimation: Hong Kong

C. K. Woo^*, T. Ho, A. Shiu, Y. S. Cheng, I. Horowitz, J. Wang

^*Corresponding author for this work

Research output: Contribution to journal › Journal article › peer-review

30 Citations (Scopus)

Abstract

Hong Kong has almost perfect electricity reliability, the result of substantial investments ultimately financed by electricity consumers who may be willing to accept lower reliability in exchange for lower bills. But consumers with high outage costs are likely to reject the reliability reduction. Our ordered-logit regression analysis of the responses by 1876 households to a telephone survey conducted in June 2013 indicates that Hong Kong residents exhibit a statistically-significant preference for their existing service reliability and rate. Moreover, the average residential cost estimate for a 1-h outage is US$45 (HK$350), topping the estimates reported in 10 of the 11 studies published in the last 10 years. The policy implication is that absent additional compelling evidence, Hong Kong should not reduce its service reliability.

Original language	English
Pages (from-to)	204-210
Number of pages	7
Journal	Energy Policy
Volume	72
DOIs	https://doi.org/10.1016/j.enpol.2014.05.002
Publication status	Published - Sept 2014

Scopus Subject Areas

Energy(all)
Management, Monitoring, Policy and Law

User-Defined Keywords

Contingent valuation survey
Electricity reliability in Hong Kong
Residential outage cost estimation

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10.1016/j.enpol.2014.05.002

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title = "Residential outage cost estimation: Hong Kong",

abstract = "Hong Kong has almost perfect electricity reliability, the result of substantial investments ultimately financed by electricity consumers who may be willing to accept lower reliability in exchange for lower bills. But consumers with high outage costs are likely to reject the reliability reduction. Our ordered-logit regression analysis of the responses by 1876 households to a telephone survey conducted in June 2013 indicates that Hong Kong residents exhibit a statistically-significant preference for their existing service reliability and rate. Moreover, the average residential cost estimate for a 1-h outage is US$45 (HK$350), topping the estimates reported in 10 of the 11 studies published in the last 10 years. The policy implication is that absent additional compelling evidence, Hong Kong should not reduce its service reliability.",

keywords = "Contingent valuation survey, Electricity reliability in Hong Kong, Residential outage cost estimation",

author = "Woo, {C. K.} and T. Ho and A. Shiu and Cheng, {Y. S.} and I. Horowitz and J. Wang",

note = "Funding Information: Major funding of this research is provided by the Hong Kong Baptist University׳s Business School . Additional funding is provided by the Hong Kong Polytechnic University׳s School of Accounting and Finance . Opinions expressed in this paper are those of the authors and do not represent the stance of the two funding universities. We thank J. Lam for her help in preparing the initial English version of the questionnaire, A. Law for her help in preparing the final Cantonese version used in the telephone survey, C.W. Tso for his timely reply to our information request, and three referees for their very helpful and constructive comments. Without implication, all errors are ours.",

year = "2014",

month = sep,

doi = "10.1016/j.enpol.2014.05.002",

language = "English",

volume = "72",

pages = "204--210",

journal = "Energy Policy",

issn = "0301-4215",

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T2 - Hong Kong

AU - Woo, C. K.

AU - Ho, T.

AU - Shiu, A.

AU - Cheng, Y. S.

AU - Horowitz, I.

AU - Wang, J.

N1 - Funding Information: Major funding of this research is provided by the Hong Kong Baptist University׳s Business School . Additional funding is provided by the Hong Kong Polytechnic University׳s School of Accounting and Finance . Opinions expressed in this paper are those of the authors and do not represent the stance of the two funding universities. We thank J. Lam for her help in preparing the initial English version of the questionnaire, A. Law for her help in preparing the final Cantonese version used in the telephone survey, C.W. Tso for his timely reply to our information request, and three referees for their very helpful and constructive comments. Without implication, all errors are ours.

PY - 2014/9

Y1 - 2014/9

N2 - Hong Kong has almost perfect electricity reliability, the result of substantial investments ultimately financed by electricity consumers who may be willing to accept lower reliability in exchange for lower bills. But consumers with high outage costs are likely to reject the reliability reduction. Our ordered-logit regression analysis of the responses by 1876 households to a telephone survey conducted in June 2013 indicates that Hong Kong residents exhibit a statistically-significant preference for their existing service reliability and rate. Moreover, the average residential cost estimate for a 1-h outage is US$45 (HK$350), topping the estimates reported in 10 of the 11 studies published in the last 10 years. The policy implication is that absent additional compelling evidence, Hong Kong should not reduce its service reliability.

AB - Hong Kong has almost perfect electricity reliability, the result of substantial investments ultimately financed by electricity consumers who may be willing to accept lower reliability in exchange for lower bills. But consumers with high outage costs are likely to reject the reliability reduction. Our ordered-logit regression analysis of the responses by 1876 households to a telephone survey conducted in June 2013 indicates that Hong Kong residents exhibit a statistically-significant preference for their existing service reliability and rate. Moreover, the average residential cost estimate for a 1-h outage is US$45 (HK$350), topping the estimates reported in 10 of the 11 studies published in the last 10 years. The policy implication is that absent additional compelling evidence, Hong Kong should not reduce its service reliability.

KW - Contingent valuation survey

KW - Electricity reliability in Hong Kong

KW - Residential outage cost estimation

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U2 - 10.1016/j.enpol.2014.05.002

DO - 10.1016/j.enpol.2014.05.002

M3 - Journal article

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SN - 0301-4215

VL - 72

SP - 204

EP - 210

JO - Energy Policy

JF - Energy Policy

ER -

Residential outage cost estimation: Hong Kong

Abstract

Scopus Subject Areas

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