Households' self-selection of a dynamic electricity tariff
AbstractOffering electricity consumers time-differentiated tariffs may increase demand responsiveness, thereby reducing peak consumption. However, one concern is that time-differentiated tariffs may also attract consumers who benefit because of their consumption pattern, even without a corresponding demand response. A discrete choice model applied to data from a residential dynamic pricing experiment indicates that higher demand flexibility increases the propensity of a household to select dynamic tariffs, while favourable consumption patterns do not influence the tariff choice. The offering of dynamic time-differentiated tariffs is then likely to increase the demand response among residential consumers.
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Bibliographic InfoPaper provided by Research Department of Statistics Norway in its series Discussion Papers with number 446.
Date of creation: Feb 2006
Date of revision:
demand response; dynamic pricing; electricity tariff; self-selection; rate option.;
Find related papers by JEL classification:
- D10 - Microeconomics - - Household Behavior - - - General
- Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-04-22 (All new papers)
- NEP-DCM-2006-05-02 (Discrete Choice Models)
- NEP-ENE-2006-05-24 (Energy Economics)
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