Do Americans consume too little natural gas? An empirical test of marginal cost pricing
AbstractThis article measures the extent to which prices exceed marginal costs in the U.S. natural gas distribution market during the period 1991-2007. We find large departures from marginal cost pricing in all 50 states, with residential and commercial customers facing average markups of over 40%. Based on conservative estimates of the price elasticity of demand, these distortions impose hundreds of millions of dollars of annual welfare loss. Moreover, current price schedules are an important preexisting distortion which should be taken into account when evaluating carbon taxes and other policies aimed at addressing external costs. Copyright (c) 2010, RAND..
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by RAND Corporation in its journal The RAND Journal of Economics.
Volume (Year): 41 (2010)
Issue (Month): 4 ()
Contact details of provider:
Postal: 1776 Main Street, P.O. Box 2138, Santa Monica, California 90407-2138
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0741-6261
More information through EDIRC
Other versions of this item:
- Davis, Lucas W. & Muehlegger, Erich, 2010. "Do Americans Consume Too Little Natural Gas? An Empirical Test Of Marginal Cost Pricing," Working paper 579, Regulation2point0.
- Lucas W. Davis & Erich Muehlegger, 2010. "Do Americans Consume Too Little Natural Gas? An Empirical Test of Marginal Cost Pricing," NBER Working Papers 15885, National Bureau of Economic Research, Inc.
- D42 - Microeconomics - - Market Structure and Pricing - - - Monopoly
- L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
- L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities
- Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
- Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Hunt Allcott & Michael Greenstone, 2012.
"Is There an Energy Efficiency Gap?,"
NBER Working Papers
17766, National Bureau of Economic Research, Inc.
- Lange, Ian & Polborn, Sarah, 2012.
"Can lobbying encourage abatement? Designing a new policy instrument,"
Stirling Economics Discussion Papers
2012-03, University of Stirling, Division of Economics.
- Ian A. Lange & Sarah Polborn, 2012. "Can Lobbying Encourage Abatement? Designing a New Policy Instrument," CESifo Working Paper Series 3760, CESifo Group Munich.
- Robert w. Hahn & Robert A. Ritz, 2013. "Does the social Cost of Carbon Matter?: An Assessment of U.S. Policy," Cambridge Working Papers in Economics 1346, Faculty of Economics, University of Cambridge.
- Magnus Söderberg & Flavio Menezes & Miguel Santolino, 2013.
"Regulatory behaviour under threat of court reversal,"
- Flavio Menezes & Magnus SÃ¶derberg & Miguel Santolino, 2012. "Regulatory behaviour under threat of court reversal," Discussion Papers Series 472, School of Economics, University of Queensland, Australia.
- Nancy L. Rose, 2013. "Learning from the Past: Insights for the Regulation of Economic Activity," NBER Chapters, in: Economic Regulation and Its Reform: What Have We Learned? National Bureau of Economic Research, Inc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
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.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.