IDEAS home Printed from https://ideas.repec.org/a/eee/juipol/v27y2013icp49-56.html
   My bibliography  Save this article

The significance of occupancy steadiness in residential consumer response to Time-of-Use pricing: Evidence from a stochastic adjustment model

Author

Listed:
  • Torriti, Jacopo

Abstract

The recent roll-out of smart metering technologies in several developed countries has intensified research on the impacts of Time-of-Use (TOU) pricing on consumption. This paper analyses a TOU dataset from the Province of Trento in Northern Italy using a stochastic adjustment model. Findings highlight the non-steadiness of the relationship between consumption and TOU price. Weather and active occupancy can partly explain future consumption in relation to price.

Suggested Citation

  • Torriti, Jacopo, 2013. "The significance of occupancy steadiness in residential consumer response to Time-of-Use pricing: Evidence from a stochastic adjustment model," Utilities Policy, Elsevier, vol. 27(C), pages 49-56.
  • Handle: RePEc:eee:juipol:v:27:y:2013:i:c:p:49-56
    DOI: 10.1016/j.jup.2013.09.005
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0957178713000568
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.jup.2013.09.005?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Hunt, Lester C. & Judge, Guy & Ninomiya, Yasushi, 2003. "Underlying trends and seasonality in UK energy demand: a sectoral analysis," Energy Economics, Elsevier, vol. 25(1), pages 93-118, January.
    2. Alberini, Anna & Filippini, Massimo, 2011. "Response of residential electricity demand to price: The effect of measurement error," Energy Economics, Elsevier, vol. 33(5), pages 889-895, September.
    3. Massimo Filippini & Lester C. Hunt, 2011. "Energy Demand and Energy Efficiency in the OECD Countries: A Stochastic Demand Frontier Approach," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 59-80.
    4. Considine, Timothy J., 2000. "The impacts of weather variations on energy demand and carbon emissions," Resource and Energy Economics, Elsevier, vol. 22(4), pages 295-314, October.
    5. Hall, Robert E, 1988. "Intertemporal Substitution in Consumption," Journal of Political Economy, University of Chicago Press, vol. 96(2), pages 339-357, April.
    6. Bin, Shui & Dowlatabadi, Hadi, 2005. "Corrigendum to "Consumer lifestyles approach to US energy use and the related CO2 emissions": [Energy Policy 33 (2005) 197-208]," Energy Policy, Elsevier, vol. 33(10), pages 1362-1363, July.
    7. Hirst, Eric, 1994. "Effects of utility demand-side management programs on uncertainty," Resource and Energy Economics, Elsevier, vol. 16(1), pages 25-45, March.
    8. Hill, Lawrence J., 1991. "Residential time-of-use pricing as a load management strategy : Effectiveness and applicability," Utilities Policy, Elsevier, vol. 1(4), pages 308-318, July.
    9. Kamerschen, David R. & Porter, David V., 2004. "The demand for residential, industrial and total electricity, 1973-1998," Energy Economics, Elsevier, vol. 26(1), pages 87-100, January.
    10. Bin, Shui & Dowlatabadi, Hadi, 2005. "Consumer lifestyle approach to US energy use and the related CO2 emissions," Energy Policy, Elsevier, vol. 33(2), pages 197-208, January.
    11. Leonard, J. Mark & Decker, Christopher S., 2012. "Determinants of voluntary electricity demand management program participation," Utilities Policy, Elsevier, vol. 20(1), pages 17-21.
    12. Palmborg, Christer, 1986. "Social habits and energy consumption in single-family homes," Energy, Elsevier, vol. 11(7), pages 643-650.
    13. Schipper, Lee & Hawk, Dianne V., 1991. "More efficient household electricity-use : An international perspective," Energy Policy, Elsevier, vol. 19(3), pages 244-265, April.
    14. Halvorsen, Robert, 1975. "Residential Demand for Electric Energy," The Review of Economics and Statistics, MIT Press, vol. 57(1), pages 12-18, February.
    15. Vassileva, Iana & Wallin, Fredrik & Dahlquist, Erik, 2012. "Analytical comparison between electricity consumption and behavioral characteristics of Swedish households in rented apartments," Applied Energy, Elsevier, vol. 90(1), pages 182-188.
    16. Shin, Jeong-Shik, 1985. "Perception of Price When Price Information Is Costly: Evidence from Residential Electricity Demand," The Review of Economics and Statistics, MIT Press, vol. 67(4), pages 591-598, November.
    17. Halvorsen, Bente & Larsen, Bodil M., 2001. "The flexibility of household electricity demand over time," Resource and Energy Economics, Elsevier, vol. 23(1), pages 1-18, January.
    18. Massimo, Filippini, 2011. "Short- and long-run time-of-use price elasticities in Swiss residential electricity demand," Energy Policy, Elsevier, vol. 39(10), pages 5811-5817, October.
    19. Tishler, A. & Ye, Y., 1993. "Minimal adjustment costs, factor demands, and seasonal time-of-use electricity rates," Resource and Energy Economics, Elsevier, vol. 15(3), pages 313-335, September.
    20. Bartusch, Cajsa & Odlare, Monica & Wallin, Fredrik & Wester, Lars, 2012. "Exploring variance in residential electricity consumption: Household features and building properties," Applied Energy, Elsevier, vol. 92(C), pages 637-643.
    21. Mansouri, Iman & Newborough, Marcus & Probert, Douglas, 1996. "Energy consumption in UK households: Impact of domestic electrical appliances," Applied Energy, Elsevier, vol. 54(3), pages 211-285, July.
    22. Flaig, Gebhard, 1990. "Household production and the short- and long-run demand for electricity," Energy Economics, Elsevier, vol. 12(2), pages 116-121, April.
    23. Kasulis, Jack J & Huettner, David A & Dikeman, Neil J, 1981. "The Feasibility of Changing Electricity Consumption Patterns," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 8(3), pages 279-290, December.
    24. Sioshansi, Fereidoon P., 1992. "Demand-side management and environmental externalities: Ramifications on utility resource planning," Utilities Policy, Elsevier, vol. 2(4), pages 320-329, October.
    25. Beenstock, Michael & Goldin, Ephraim & Nabot, Dan, 1999. "The demand for electricity in Israel," Energy Economics, Elsevier, vol. 21(2), pages 168-183, April.
    26. Yu, William & Jamasb, Tooraj & Pollitt, Michael, 2009. "Does weather explain cost and quality performance? An analysis of UK electricity distribution companies," Energy Policy, Elsevier, vol. 37(11), pages 4177-4188, November.
    27. Brennan, Timothy J., 2010. "Optimal energy efficiency policies and regulatory demand-side management tests: How well do they match?," Energy Policy, Elsevier, vol. 38(8), pages 3874-3885, August.
    28. Cooper, Ian, 1982. "Comfort theory and practice: Barriers to the conservation of energy by building occupants," Applied Energy, Elsevier, vol. 11(4), pages 243-288, August.
    29. Filippini, Massimo, 1995. "Swiss residential demand for electricity by time-of-use," Resource and Energy Economics, Elsevier, vol. 17(3), pages 281-290, November.
    30. Torriti, Jacopo, 2012. "Price-based demand side management: Assessing the impacts of time-of-use tariffs on residential electricity demand and peak shifting in Northern Italy," Energy, Elsevier, vol. 44(1), pages 576-583.
    31. Yamamoto, Yoshihiro & Suzuki, Akihiko & Fuwa, Yasuhiro & Sato, Tomohiro, 2008. "Decision-making in electrical appliance use in the home," Energy Policy, Elsevier, vol. 36(5), pages 1679-1686, May.
    32. Dulleck, Uwe & Kaufmann, Sylvia, 2004. "Do customer information programs reduce household electricity demand?--the Irish program," Energy Policy, Elsevier, vol. 32(8), pages 1025-1032, June.
    33. Bernard, Jean-Thomas & Bolduc, Denis & Yameogo, Nadège-Désirée, 2011. "A pseudo-panel data model of household electricity demand," Resource and Energy Economics, Elsevier, vol. 33(1), pages 315-325, January.
    34. Severin Borenstein, 2005. "The Long-Run Efficiency of Real-Time Electricity Pricing," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 93-116.
    35. Kohler, Daniel F. & Mitchell, Bridger M., 1984. "Response to residential time-of-use electricity rates : How transferable are the findings?," Journal of Econometrics, Elsevier, vol. 26(1-2), pages 141-177.
    36. Mountain, Dean C. & Lawson, Evelyn L., 1995. "Some initial evidence of Canadian responsiveness to time-of-use electricity rates: Detailed daily and monthly analysis," Resource and Energy Economics, Elsevier, vol. 17(2), pages 189-212, August.
    37. Garcia-Cerrutti, L. Miguel, 2000. "Estimating elasticities of residential energy demand from panel county data using dynamic random variables models with heteroskedastic and correlated error terms," Resource and Energy Economics, Elsevier, vol. 22(4), pages 355-366, October.
    38. Harris, John L. & Liu, Lon-Mu, 1993. "Dynamic structural analysis and forecasting of residential electricity consumption," International Journal of Forecasting, Elsevier, vol. 9(4), pages 437-455, December.
    39. Swan, Lukas G. & Ugursal, V. Ismet, 2009. "Modeling of end-use energy consumption in the residential sector: A review of modeling techniques," Renewable and Sustainable Energy Reviews, Elsevier, vol. 13(8), pages 1819-1835, October.
    40. Torriti, Jacopo & Hassan, Mohamed G. & Leach, Matthew, 2010. "Demand response experience in Europe: Policies, programmes and implementation," Energy, Elsevier, vol. 35(4), pages 1575-1583.
    41. Torriti, Jacopo, 2012. "Demand Side Management for the European Supergrid: Occupancy variances of European single-person households," Energy Policy, Elsevier, vol. 44(C), pages 199-206.
    42. Silk, Julian I. & Joutz, Frederick L., 1997. "Short and long-run elasticities in US residential electricity demand: a co-integration approach," Energy Economics, Elsevier, vol. 19(4), pages 493-513, October.
    43. Darby, Sarah J. & McKenna, Eoghan, 2012. "Social implications of residential demand response in cool temperate climates," Energy Policy, Elsevier, vol. 49(C), pages 759-769.
    44. Peter C. Reiss & Matthew W. White, 2005. "Household Electricity Demand, Revisited," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 72(3), pages 853-883.
    45. Herbert, John H., 1988. "Weather, the estimation of residential energy demand relationships and the reporting of data," Energy Economics, Elsevier, vol. 10(4), pages 324-325, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dong, Jun & Jiang, Yuzheng & Liu, Dongran & Dou, Xihao & Liu, Yao & Peng, Shicheng, 2022. "Promoting dynamic pricing implementation considering policy incentives and electricity retailers’ behaviors: An evolutionary game model based on prospect theory," Energy Policy, Elsevier, vol. 167(C).
    2. Majdalani, Naim & Aelenei, Daniel & Lopes, Rui Amaral & Silva, Carlos Augusto Santo, 2020. "The potential of energy flexibility of space heating and cooling in Portugal," Utilities Policy, Elsevier, vol. 66(C).
    3. Parrish, Bryony & Heptonstall, Phil & Gross, Rob & Sovacool, Benjamin K., 2020. "A systematic review of motivations, enablers and barriers for consumer engagement with residential demand response," Energy Policy, Elsevier, vol. 138(C).
    4. Klaassen, E.A.M. & Kobus, C.B.A. & Frunt, J. & Slootweg, J.G., 2016. "Responsiveness of residential electricity demand to dynamic tariffs: Experiences from a large field test in the Netherlands," Applied Energy, Elsevier, vol. 183(C), pages 1065-1074.
    5. Francesco Liberati & Alessandro Di Giorgio, 2017. "Economic Model Predictive and Feedback Control of a Smart Grid Prosumer Node," Energies, MDPI, vol. 11(1), pages 1-23, December.
    6. Jacopo Torriti, 2022. "Household electricity demand, the intrinsic flexibility index and UK wholesale electricity market prices," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 24(1), pages 7-27, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Torriti, Jacopo, 2012. "Price-based demand side management: Assessing the impacts of time-of-use tariffs on residential electricity demand and peak shifting in Northern Italy," Energy, Elsevier, vol. 44(1), pages 576-583.
    2. Blazquez Leticia & Nina Boogen & Massimo Filippini, 2012. "Residential electricity demand for Spain: new empirical evidence using aggregated data," CEPE Working paper series 12-82, CEPE Center for Energy Policy and Economics, ETH Zurich.
    3. Kiran B Krishnamurthy, Chandra & Kriström, Bengt, 2013. "A cross-country analysis of residential electricity demand in 11 OECD-countries," CERE Working Papers 2013:5, CERE - the Center for Environmental and Resource Economics, revised 30 Jun 2014.
    4. Salari, Mahmoud & Javid, Roxana J., 2016. "Residential energy demand in the United States: Analysis using static and dynamic approaches," Energy Policy, Elsevier, vol. 98(C), pages 637-649.
    5. Alberini, Anna & Filippini, Massimo, 2011. "Response of residential electricity demand to price: The effect of measurement error," Energy Economics, Elsevier, vol. 33(5), pages 889-895, September.
    6. Jacopo Torriti & Philipp Grunewald, 2014. "Demand Side Response: Patterns in Europe and Future Policy Perspectives under Capacity Mechanisms," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 1).
    7. Blázquez, Leticia & Boogen, Nina & Filippini, Massimo, 2013. "Residential electricity demand in Spain: New empirical evidence using aggregate data," Energy Economics, Elsevier, vol. 36(C), pages 648-657.
    8. Krishnamurthy, Chandra Kiran B. & Kriström, Bengt, 2015. "A cross-country analysis of residential electricity demand in 11 OECD-countries," Resource and Energy Economics, Elsevier, vol. 39(C), pages 68-88.
    9. Alberini, Anna & Gans, Will & Velez-Lopez, Daniel, 2011. "Residential consumption of gas and electricity in the U.S.: The role of prices and income," Energy Economics, Elsevier, vol. 33(5), pages 870-881, September.
    10. Jia, Jun-Jun & Guo, Jin & Wei, Chu, 2021. "Elasticities of residential electricity demand in China under increasing-block pricing constraint: New estimation using household survey data," Energy Policy, Elsevier, vol. 156(C).
    11. Mark Miller & Anna Alberini, 2015. "Sensitivity of price elasticity of demand to aggregation, unobserved heterogeneity, price trends, and price endogeneity: Evidence from U.S. Data," CER-ETH Economics working paper series 15/223, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    12. Feuerriegel, Stefan & Neumann, Dirk, 2014. "Measuring the financial impact of demand response for electricity retailers," Energy Policy, Elsevier, vol. 65(C), pages 359-368.
    13. Cho, Seong-Hoon & Kim, Taeyoung & Kim, Hyun Jae & Park, Kihyun & Roberts, Roland K., 2015. "Regionally-varying and regionally-uniform electricity pricing policies compared across four usage categories," Energy Economics, Elsevier, vol. 49(C), pages 182-191.
    14. Nina Boogen & Souvik Datta & Massimo Filippini, 2014. "Going beyond tradition: Estimating residential electricity demand using an appliance index and energy services," CER-ETH Economics working paper series 14/200, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    15. Sardianou, Eleni, 2007. "Estimating energy conservation patterns of Greek households," Energy Policy, Elsevier, vol. 35(7), pages 3778-3791, July.
    16. Torriti, Jacopo, 2012. "Demand Side Management for the European Supergrid: Occupancy variances of European single-person households," Energy Policy, Elsevier, vol. 44(C), pages 199-206.
    17. Pereira Uhr, Daniel de Abreu & Squarize Chagas, André Luis & Ziero Uhr, Júlia Gallego, 2019. "Estimation of elasticities for electricity demand in Brazilian households and policy implications," Energy Policy, Elsevier, vol. 129(C), pages 69-79.
    18. Athukorala, P.P.A Wasantha & Wilson, Clevo, 2010. "Estimating short and long-term residential demand for electricity: New evidence from Sri Lanka," Energy Economics, Elsevier, vol. 32(Supplemen), pages 34-40, September.
    19. Pellini, Elisabetta, 2021. "Estimating income and price elasticities of residential electricity demand with Autometrics," Energy Economics, Elsevier, vol. 101(C).
    20. Kavousian, Amir & Rajagopal, Ram & Fischer, Martin, 2013. "Determinants of residential electricity consumption: Using smart meter data to examine the effect of climate, building characteristics, appliance stock, and occupants' behavior," Energy, Elsevier, vol. 55(C), pages 184-194.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:juipol:v:27:y:2013:i:c:p:49-56. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.sciencedirect.com/journal/utilities-policy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.