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Household Electricity Demand, Revisited
Abstract
Recent efforts to restructure electricity markets have renewed interest in assessing how consumers respond to price changes. This paper develops a model for evaluating the effects of alternative tariff designs on electricity use. The model concurrently addresses several interrelated difficulties posed by nonlinear pricing, heterogeneity in consumer price sensitivity, and consumption aggregation over appliances and time. We estimate the model using extensive data for a representative sample of 1300 California households. The results imply a strikingly skewed distribution of household electricity price elasticities in the population, with a small fraction of households accounting for most aggregate demand response. We then estimate the aggregate and distributional consequences of recent tariff structure changes in California, the consumption effects of which have been the subject of considerable debate.
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Cites
Shadow Prices, Market Wages, and Labor Supply
Heckman, J. (1974) · Econometrica · doi:10.2307/1913937 · Cited by 1,852
Cited by
Social norms and energy conservation
Allcott, H. (2011) · Journal of Public Economics · doi:10.1016/j.jpubeco.2011.03.003 · Cited by 2,802
Kavousian, A., Rajagopal, R., & Fischer, M. (2013) · Energy · doi:10.1016/j.energy.2013.03.086 · Cited by 591
Rethinking real-time electricity pricing
Allcott, H. (2011) · Resource and Energy Economics · doi:10.1016/j.reseneeco.2011.06.003 · Cited by 441
Nonprice incentives and energy conservation
Asensio, O. I., & Delmas, M. A. (2015) · Proceedings of the National Academy of Sciences · doi:10.1073/pnas.1401880112 · Cited by 422
Residential consumption of gas and electricity in the U.S.: The role of prices and income
Alberini, A., Gans, W., & Velez-Lopez, D. (2011) · Energy Economics · doi:10.1016/j.eneco.2011.01.015 · Cited by 379
Metadata
- Authors
- Reiss, P. C., & White, M. W.
- Venue
- Review of Economic Studies
- Publisher
- Oxford University Press (OUP)
- Published
- 2005-07
- Volume
- 72
- Issue
- 3
- Pages
- 853-883
- ISSN
- 0034-6527 (ISSN-L)
- 1467-937X
- OpenAlex
- W3123403087
- Cited by
- 582
- References
- 1
- FWCI
- 7.56
- Type
- journal article
- Language
- en
- Open access
- closed
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Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
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