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Pareto Dominance Through Self-Selecting Tariffs: The Case of TOU Electricity Rates for Agricultural Customers

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  • Kenneth E. Train
  • Nate Toyama

Abstract

We estimate the impact of a voluntary time-of-use (TOU) rate option for electricity used in agricultural pumping. We find that offering the TOU tariff in addition to standard, non-TOU rates increases the profits of the electric utility and Pareto dominates the offering of standard rates alone. The analysis provides an example of the fact that Pareto improvements can be obtained by judiciously expanding the set of selfselecting tariffs offered by a public utility.

Suggested Citation

  • Kenneth E. Train & Nate Toyama, 1989. "Pareto Dominance Through Self-Selecting Tariffs: The Case of TOU Electricity Rates for Agricultural Customers," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 91-109.
    • Handle: RePEc:aen:journl:1989v10-01-a08
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    1. Thomas N. Taylor & Peter M. Schwarz, 1986. "A Residential Demand Charge: Evidence from the Duke Power Time-of-Day Pricing Experiment," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 135-151.
    2. Chi-Keung Woo, 1985. "Demand for Electricity of Small Nonresidential Customers under Time-Of-Use (TOU) Pricing," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 115-127.
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    Cited by:

    1. Matthew Nagler, 2006. "An exploratory analysis of the determinants of cooperative advertising participation rates," Marketing Letters, Springer, vol. 17(2), pages 91-102, April.

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