Information Effects in Valuation of Electricity
and Water Service Attributes Using Contingent
EPRG Working Paper 1127
Cambridge Working Paper in Economics 1156
The role of information in consumers' decision making process is a rich area of
research especially with regards to market goods. Less attention has been paid to
information effects in consumers' valuation of non-market goods. Understanding how
information can affect consumers is particularly pertinent to the electricity sector in
the UK which is undergoing fundamental changes that will have implications on both
service levels and prices.
This paper applies the contingent valuation method (CVM) to investigate information
effects in the valuation of electricity and water attributes through two self-designed
surveys. There are two key considerations of this research; firstly, the paper
explores whether the relevance of the service attribute can affect respondents'
processing of the information presented in the survey. Secondly, the paper
investigates whether the quantity and complexity of information places a cognitive