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The Welfare Impact of Rising Block Pricing: Electricity in Colombia

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  • Rodney Maddock
  • Elkin Castaño

Abstract

In Medellin, Colombia, electricity prices follow an unusual system of rising block prices. The stated objective of the policy is to redistribute income. In this paper we calculate the degree of redistribution achieved relative to that of a horizontal price schedule. We also calculate the efficiency cost of discrimination. The data come from a survey of over 1000 residential users of electricity.

Suggested Citation

  • Rodney Maddock & Elkin Castaño, 1991. "The Welfare Impact of Rising Block Pricing: Electricity in Colombia," The Energy Journal, , vol. 12(4), pages 65-78, October.
    • Handle: RePEc:sae:enejou:v:12:y:1991:i:4:p:65-78
    DOI: 10.5547/ISSN0195-6574-EJ-Vol12-No4-4
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    References listed on IDEAS

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    1. Dubin, Jeffrey A & McFadden, Daniel L, 1984. "An Econometric Analysis of Residential Electric Appliance Holdings and Consumption," Econometrica, Econometric Society, vol. 52(2), pages 345-362, March.
    2. Hausmann, J. A. & Kinnucan, M. & McFaddden, D., 1979. "A two-level electricity demand model : Evaluation of the connecticut time-of-day pricing test," Journal of Econometrics, Elsevier, vol. 10(3), pages 263-289, August.
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