Preferences in Funding Public Goods Provision - An Experimental Investigation Referring to the Example of Renewables

This paper presents an experimental investigation of the individual willingness to pay (WTP) for green electricity. The experimental design comprises a public-choice scenario and an individual-choice scenario. It involves three different payment vehicles for the public promotion of renewables: direct tax, indirect tax, and CO2 tax. We test for the extent of free-riding, the impact of different payment vehicles on individual WTP, and crowding-out effects caused by the public promotion of green electricity. Combined with data collected by means of a supplementary opinion survey, our results indicate that individuals prefer binding collective contributions rather than individual market-driven activities in this field.