title: Using stated preference methods to design cost-effective subsidy programs to induce technology adoption: an application to a stove program in southern Chile.
abstract: We study the design of an economic incentive based program - a subsidy - to induce adoption of more efficient technology in a pollution reduction program in southern Chile. Stated preferences methods, contingent valuation (CV), and choice experiment (CE) are used to estimate the probability of adoption and the willingness to share the cost of a new technology by a household. The cost-effectiveness property of different subsidy schemes is explored numerically for different regulatory objectives. Our results suggest that households are willing to participate in voluntary programs and to contribute by paying a share of the cost of adopting more efficient technologies. We find that attributes of the existing and the new technology, beyond the price, are relevant determinant factors of the participation decision and payment. Limited access to credit markets for low income families can be a major barrier for an effective implementation of these types of programs. Variations in the design of the subsidy and on the regulator's objective and constraints can have significant impact on the level and the cost of reduction of aggregate emissions achieved.
authors.affiliation: Departamento de Ingeniería Matemática, Universidad de La Frontera, Avenida Francisco Salazar 01145, Temuco, Chile; Research Nucleus in Environmental and Resource Economics - MSI, Chile. Electronic address: walter.gomez@ufrontera.cl.
authors.forename: Walter
authors.initials: W
authors.lastname: Gómez
authors.affiliation: Facultad de Ciencias Empresariales, Universidad de Talca, Campus Lircay, Talca, Chile; Research Nucleus in Environmental and Resource Economics - MSI, Chile; Interdisciplinary Center for Aquaculture Research (INCAR), Chile. Electronic address: hsalgado@utalca.cl.
authors.forename: Hugo
authors.initials: H
authors.lastname: Salgado
authors.affiliation: School of Business and Economics, Universidad del Desarrollo, Ainavillo 456, Concepción, Chile; Departamento de Economía, Universidad de Concepción, Victoria 471, Barrio Universitario, Concepción, Chile; Research Nucleus in Environmental and Resource Economics - MSI, Chile. Electronic address: fvasquez@udd.cl.
authors.forename: Felipe
authors.initials: F
authors.lastname: Vásquez
authors.affiliation: Departamento de Economía, Universidad de Concepción, Victoria 471, Barrio Universitario, Concepción, Chile; Research Nucleus in Environmental and Resource Economics - MSI, Chile; Interdisciplinary Center for Aquaculture Research (INCAR), Chile. Electronic address: cchavez@udec.cl.
authors.forename: Carlos
authors.initials: C
authors.lastname: Chávez
mesh_terms: D000397:Air Pollution / Q000517:prevention & control*; D002677:Chile; D002755:Choice Behavior; D003296:Cooking / Q000295:instrumentation*; D003362:Cost-Benefit Analysis; D052918:Environmental Restoration and Remediation / Q000379:methods*; D018803:Models, Economic; D052638:Particulate Matter; D013672:Technology
chemical_list: D052638:Particulate Matter
keywords: Choice experiments; Contingent valuation; Cost-effectiveness; Environmental policy; Households; Stated preferences; Urban pollution