Replication data for: Do Consumers Respond to Marginal or Average Price? Evidence from Nonlinear Electricity Pricing
Principal Investigator(s): View help for Principal Investigator(s) Koichiro Ito
Version: View help for Version V1
| Name | File Type | Size | Last Modified |
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| AER_2012_1431_Ito_Program | 10/11/2019 09:49:PM | ||
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text/plain | 14.6 KB | 10/11/2019 05:49:PM |
Project Citation:
Ito, Koichiro. Replication data for: Do Consumers Respond to Marginal or Average Price? Evidence from Nonlinear Electricity Pricing. Nashville, TN: American Economic Association [publisher], 2014. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-11. https://doi.org/10.3886/E112736V1
Project Description
Summary:
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Nonlinear pricing and taxation complicate economic decisions by
creating multiple marginal prices for the same good. This paper
provides a framework to uncover consumers' perceived price of
nonlinear price schedules. I exploit price variation at spatial
discontinuities in electricity service areas, where households in
the same city experience substantially different nonlinear pricing.
Using household-level panel data from administrative records, I find
strong evidence that consumers respond to average price rather than
marginal or expected marginal price. This suboptimizing behavior
makes nonlinear pricing unsuccessful in achieving its policy goal of
energy conservation and critically changes the welfare implications
of nonlinear pricing.
Scope of Project
JEL Classification:
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D12 Consumer Economics: Empirical Analysis
L11 Production, Pricing, and Market Structure; Size Distribution of Firms
L94 Electric Utilities
L98 Industry Studies: Utilities and Transportation: Government Policy
Q41 Energy: Demand and Supply; Prices
D12 Consumer Economics: Empirical Analysis
L11 Production, Pricing, and Market Structure; Size Distribution of Firms
L94 Electric Utilities
L98 Industry Studies: Utilities and Transportation: Government Policy
Q41 Energy: Demand and Supply; Prices
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