Are two-part tariffs efficient when consumers plan ahead?: An empirical study
AbstractDuring the last two decades there has been an increase in using dynamic tariffs for billing household electricity consumption. This has questioned the suitability of traditional pricing schemes, such as two-part tariffs, since they contribute to create marked peak and offpeak demands. The aim of this paper is to assess if two-part tariffs are an efficient pricing scheme using Spanish household electricity microdata. An ordered probit model with instrumental variables on the determinants of power level choice and non-paramentric spline regressions on the electricity price distribution will allow us to distinguish between the tariff structure choice and the simultaneous demand decisions. We conclude that electricity consumption and dwellings’ and individuals’ characteristics are key determinants of the fixed charge paid by Spanish households Finally, the results point to the inefficiency of the two-part tariff as those consumers who consume more electricity pay a lower price than the others.
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.
Bibliographic InfoPaper provided by Xarxa de Referència en Economia Aplicada (XREAP) in its series Working Papers with number CREAP2006-04.
Length: 29 pages
Date of creation: Oct 2006
Date of revision: Oct 2006
Contact details of provider:
Postal: Espai de Recerca en Economia, Facultat de Ciències Econòmiques i Empresarials, Universitat de Barcelona, c/ Tinent Coronel Valenzuela, 1-11, 08034 Barcelona
Web page: http://www.pcb.ub.edu/xreap
More information through EDIRC
Regulation; electricity; consumer behavior: empirical analysis.;
Find related papers by JEL classification:
- L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
- Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-05-12 (All new papers)
- NEP-DCM-2007-05-12 (Discrete Choice Models)
- NEP-ENE-2007-05-12 (Energy Economics)
- NEP-MIC-2007-05-12 (Microeconomics)
- NEP-MKT-2007-05-12 (Marketing)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Christian Durán Weitkamp & Mónica Martín Bofarull & Federico Pablo Martí, 2008. "Economic effects of road accessibility in the Pyrenees: user perspective," Working Papers XREAP2008-01, Xarxa de Referència en Economia Aplicada (XREAP), revised Jan 2008.
- Anna Matas Prats & José Luís Raymond Bara & José Luís Raymond Bara, 2008. "Job accessibility and employment probability," Working Papers XREAP2008-05, Xarxa de Referència en Economia Aplicada (XREAP), revised May 2008.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: () The email address of this maintainer does not seem to be valid anymore. Please ask to update the entry or send us the correct address.
If references are entirely missing, you can add them using this form.