Data and Code for: Do Consumers Distinguish Fixed Cost from Variable Cost? “Schmeduling” in Two-Part Tariffs in Energy

Principal Investigator(s): View help for Principal Investigator(s) Koichiro Ito, University of Chicago. Harris School of Public Policy; Shuang Zhang, Imperial College London

Version: View help for Version V1

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Project Description

Summary:

A central assumption in economics is that consumers properly distinguish fixed cost from vari- able cost. This assumption is fundamental to various economic theories, including optimal taxation, redistribution, and price discrimination. Using a quasi-experiment in heating price reform in China, we find empirical evidence that is inconsistent with this conventional assump- tion, and more consistent with the “schmeduling” model in Liebman and Zeckhauser (2004). As we demonstrate its policy implications for two-part energy tariffs, this schmeduling behavior makes fixed costs directly relevant to the perceived relative prices of goods, and therefore alters the welfare implications of price, tax, and subsidy designs.

Scope of Project

Subject Terms: Economics

JEL Classification:
Q50 Environmental Economics: General

Geographic Coverage: China

Universe: Households in Tianjin, China during 2008-2019

Data Type(s): administrative records data

Methodology

Data Source: 1. Anonymous Firm. 2019. “Household heating usage data.” Unpublished data. Accessed May 2019.
2. Tianjin Environmental Monitoring Center. 2018. “CEMS data.” http://jiance.tianjinep.com. Accessed in December 2018. (Note: this website had been taken down since 2021. We have not found alternative sources of CEMS data since then.)
3. China National Environmental Monitoring Center. 2019. “Ambient pollution data.” https://www.cnemc.cn. Accessed in February 2019. (Note: this website no longer publishes monitor-level pollution data. Alternatively, the new official website that publishes real time pollution data is https://air.cnemc.cn:18007, and historical data (including our study time period) can be found in this linkhttps://quotsoft.net/air/)

Unit(s) of Observation: Household

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Published Versions

V1 [2025-03-26]

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