IDEAS home Printed from https://ideas.repec.org/a/anr/reseco/v9y2017p337-359.html
   My bibliography  Save this article

Household Response to Time-Varying Electricity Prices

Author

Listed:
  • Matthew Harding

    (Department of Economics, University of California, Irvine, California 92697)

  • Steven Sexton

    (Sanford School of Public Policy, Duke University, Durham, North Carolina 27708)

Abstract

The diffusion of smart metering technology and intermittent renewable electricity generation capacity makes the deployment of time-varying electricity rates increasingly feasible and important to the functioning of electricity grids. Such rates, which economists advocate to more efficiently match supply and demand, remain rare, though experiments assessing consumer responses are not. This review synthesizes evaluations of these experiments in the context of a theory of consumer inattention and adjustment costs that posits a role for automation technology to boost the short-run price elasticity of demand and affect demand-side reductions that can lower generation costs.

Suggested Citation

  • Matthew Harding & Steven Sexton, 2017. "Household Response to Time-Varying Electricity Prices," Annual Review of Resource Economics, Annual Reviews, vol. 9(1), pages 337-359, October.
    • Handle: RePEc:anr:reseco:v:9:y:2017:p:337-359
    DOI: 10.1146/annurev-resource-100516-053437
    as

    Download full text from publisher

    File URL: https://doi.org/10.1146/annurev-resource-100516-053437
    Download Restriction: Full text downloads are only available to subscribers. Visit the abstract page for more information.
    File URL: https://libkey.io/10.1146/annurev-resource-100516-053437?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Blonz, Joshua & Palmer, Karen & Wichman, Casey & Wietelman, Derek C., 2021. "Smart Thermostats, Automation, and Time-Varying Prices," RFF Working Paper Series 21-20, Resources for the Future.
    2. Hirth, Lion & Khanna, Tarun & Ruhnau, Oliver, 2023. "How aggregate electricity demand responds to hourly wholesale price fluctuations," EconStor Preprints 272048, ZBW - Leibniz Information Centre for Economics.
    3. Harding, Matthew & Kettler, Kyle & Lamarche, Carlos & Ma, Lala, 2023. "The (alleged) environmental and social benefits of dynamic pricing," Journal of Economic Behavior & Organization, Elsevier, vol. 205(C), pages 574-593.
    4. Alexandre Mayol & Carine Staropoli, 2021. "Giving consumers too many choices: a false good idea? A lab experiment on water and electricity tariffs," European Journal of Law and Economics, Springer, vol. 51(2), pages 383-410, April.
    5. Fabra, Natalia, 2021. "The energy transition: An industrial economics perspective," International Journal of Industrial Organization, Elsevier, vol. 79(C).
    6. Stelmach, Greg & Zanocco, Chad & Flora, June & Rajagopal, Ram & Boudet, Hilary S., 2020. "Exploring household energy rules and activities during peak demand to better determine potential responsiveness to time-of-use pricing," Energy Policy, Elsevier, vol. 144(C).
    7. Kim, Jihyo & Lee, Soomin & Jang, Heesun, 2022. "Lessons from residential electricity demand analysis on the time of use pricing experiment in South Korea," Energy Economics, Elsevier, vol. 113(C).
    8. Bailey, Megan R. & Brown, David P. & Shaffer, Blake & Wolak, Frank A., 2023. "Show Me the Money! Incentives and Nudges to Shift Electric Vehicle Charge Timing," Working Papers 2023-8, University of Alberta, Department of Economics.
    9. Leslie A. Martin, 2022. "Driving on Sunbeams: Interactions Between Price Incentives for Electric Vehicles, Residential Solar Photovoltaics and Household Battery Systems," Economic Papers, The Economic Society of Australia, vol. 41(4), pages 369-384, December.
    10. Kapeller, Rudolf & Cohen, Jed J. & Kollmann, Andrea & Reichl, Johannes, 2023. "Incentivizing residential electricity consumers to increase demand during periods of high local solar generation," Energy Economics, Elsevier, vol. 127(PA).
    11. Gosnell, Greer & McCoy, Daire, 2023. "Market failures and willingness to accept smart meters: Experimental evidence from the UK," Journal of Environmental Economics and Management, Elsevier, vol. 118(C).
    12. Satre-Meloy, Aven & Diakonova, Marina & Grünewald, Philipp, 2020. "Cluster analysis and prediction of residential peak demand profiles using occupant activity data," Applied Energy, Elsevier, vol. 260(C).
    13. Harding, Matthew & Lamarche, Carlos, 2019. "A panel quantile approach to attrition bias in Big Data: Evidence from a randomized experiment," Journal of Econometrics, Elsevier, vol. 211(1), pages 61-82.
    14. Cloé Garnache & Øystein Hernæs & Anders Gravir Imenes, 2022. "Which Households Respond to Electricity Peak Pricing Amid High Levels of Electrification?," CESifo Working Paper Series 9657, CESifo.
    15. Wong, Pui Ting & Rau, Henrike, 2023. "Time of Use tariffs, childcare and everyday temporalities in the US and China: Evidence from time-use and sequence-network analysis," Energy Policy, Elsevier, vol. 172(C).

    More about this item

    Keywords

    electricity; dynamic prices; time-of-use rate; demand response; peak load; automation;
    All these keywords.

    JEL classification:

    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:anr:reseco:v:9:y:2017:p:337-359. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: http://www.annualreviews.org (email available below). General contact details of provider: http://www.annualreviews.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.