Seasonal Electricity Demand and Pricing Analysis with a Variable Response Model
AbstractTo forecast accurately the welfare gains and effects on demand from introducing seasonal electricity rates, we use a variable response model with data from the Los Angeles Electricity Rate Study. The model exploits the time series and cross sectional variation in the data and permits household-specific responses to hot and cold weather and in the "permanent" level of consumption. The full information maximum likelihood estimates permit more flexible and accurate forecasts as well as appropriate test statistics. We find that price elasticity is small but significant and that it increases with hotter weather. These are important differences among subpopulations, but the overall welfare gain appears very small in absolute terms and small when compared with the gains from introducing time-of-day pricing estimated from the TOD component of the Los Angeles Study.
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 The RAND Corporation in its journal Bell Journal of Economics.
Volume (Year): 12 (1981)
Issue (Month): 1 (Spring)
Contact details of provider:
Web page: http://www.rje.org
You can help add them by filling out this form.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.