Valuing the resilience of the electrical power infrastructure

The reliability of electrical power supply is amongst the ambient conditions that inform house purchase decisions in all major cities. Where there is sufficient variation in outages and infrastructural conditions across an urban system it is possible to use hedonic price functions to estimate people´s willingness to pay for more reliability in power supply (or willingness to accept compensation for less reliability in power supply). We illustrate the approach using estimates from a hedonic valuation of the reliability of electrical power supply in Phoenix as a function of infrastructural characteristics, environmental conditions (vegetation in particular), and the interactions between the two. It infers the value of infrastructures that contribute, in different ways, to the likelihood of outages.