Estimating the willingness to pay for Warmer and Drier Homes.

Abstract

New Zealand is one of several countries to use subsidies for retrofitting insulation and installing improved heating devices such as heat pumps. The valuation of these devices by the affected populations remains unknown. We investigate willingness to pay for such devices, using a choice experiment with a sample of Pacific Islanders in the upper North Island. This is a high-risk group for respiratory disease, who typically rent crowded and inadequately heated dwellings. Using both conditional logit and panel mixed logit models, we find reasonably precise estimates of the willingness to pay for four improved heating and humidity control devices, which would cover the capital costs of two of the devices, and about three-quarters of the cost of the other two devices.