IDEAS home Printed from https://ideas.repec.org/a/inm/ormnsc/v69y2023i12p7784-7798.html
   My bibliography  Save this article

Field Experimental Evidence on the Effect of Pricing on Residential Electricity Conservation

Author

Listed:
  • Jesse Burkhardt

    (Department of Agricultural and Resource Economics, Colorado State University, Fort Collins, Colorado 80523)

  • Kenneth T. Gillingham

    (School of the Environment, Yale University, New Haven, Connecticut 06511)

  • Praveen K. Kopalle

    (Dartmouth College, Tuck School of Business, Hanover, New Hampshire 03755)

Abstract

This study examines how electric utilities and regulators can encourage residential consumers to conserve electricity during the hottest summer days and shift electricity load from the day to off-peak, nighttime hours. We analyze a two-year field experiment involving 280 Texas households that explores approaches to conservation and load-shifting to enable emission reductions and reduce generation costs. Our critical peak pricing intervention reduces electricity consumption by 14% on the peak hours of the hottest days, leading to greenhouse gas emission reductions of about 16%. A key contribution of this study is the use of high-frequency appliance-level data. We show that 74% of the critical peak response is from reducing air conditioning. In a complementary nighttime pilot program, consumers respond strongly to lower prices by programming the timing of electric vehicle charging. Our work highlights how automation can influence the consumer tradeoffs relating to effort costs, discomfort, monetary incentives, and warm glow.

Suggested Citation

  • Jesse Burkhardt & Kenneth T. Gillingham & Praveen K. Kopalle, 2023. "Field Experimental Evidence on the Effect of Pricing on Residential Electricity Conservation," Management Science, INFORMS, vol. 69(12), pages 7784-7798, December.
    • Handle: RePEc:inm:ormnsc:v:69:y:2023:i:12:p:7784-7798
    DOI: 10.1287/mnsc.2020.02074
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/mnsc.2020.02074
    Download Restriction: no
    File URL: https://libkey.io/10.1287/mnsc.2020.02074?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
    ---><---

    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:inm:ormnsc:v:69:y:2023:i:12:p:7784-7798. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    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.