IDEAS home Printed from https://ideas.repec.org/a/spr/jecstr/v6y2017i1d10.1186_s40008-017-0064-0.html
   My bibliography  Save this article

Which dynamic pricing rule is most preferred by consumers?—Application of choice experiment

Author

Listed:
  • Yumi Yoshida

    (Fukui University of Technology)

  • Kenta Tanaka

    (Musashi University)

  • Shunsuke Managi

    (Kyushu University
    Queensland University of Technology)

Abstract

This study investigates consumers’ preference for dynamic pricing rules using a choice experiment. Among alternative electricity pricing rules, time of use (TOU) is most preferred by consumers, and our estimation results show that TOU has the highest value of WTP among pricing rules. Furthermore, consumers’ characteristics affect their choice of a pricing rule. Our results show that risk preference in particular affects the choice probability of each pricing rule.

Suggested Citation

  • Yumi Yoshida & Kenta Tanaka & Shunsuke Managi, 2017. "Which dynamic pricing rule is most preferred by consumers?—Application of choice experiment," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 6(1), pages 1-11, December.
    • Handle: RePEc:spr:jecstr:v:6:y:2017:i:1:d:10.1186_s40008-017-0064-0
    DOI: 10.1186/s40008-017-0064-0
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1186/s40008-017-0064-0
    File Function: Abstract
    Download Restriction: no
    File URL: https://libkey.io/10.1186/s40008-017-0064-0?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
    ---><---

    References listed on IDEAS

    as
    1. Severin Borenstein, 2007. "Customer Risk from Real-Time Retail Electricity Pricing: Bill Volatility and Hedgability," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 111-130.
    2. Paul L. Joskow & Catherine D. Wolfram, 2012. "Dynamic Pricing of Electricity," American Economic Review, American Economic Association, vol. 102(3), pages 381-385, May.
    3. Faruqui, Ahmad & George, Stephen, 2005. "Quantifying Customer Response to Dynamic Pricing," The Electricity Journal, Elsevier, vol. 18(4), pages 53-63, May.
    4. Allcott, Hunt, 2011. "Rethinking real-time electricity pricing," Resource and Energy Economics, Elsevier, vol. 33(4), pages 820-842.
    5. Chao, Hung-Po & Peck, Stephen, 1996. "A Market Mechanism for Electric Power Transmission," Journal of Regulatory Economics, Springer, vol. 10(1), pages 25-59, July.
    6. S. Borenstein, 2013. "Effective and Equitable Adoption of Opt-In Residential Dynamic Electricity Pricing," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 42(2), pages 127-160, March.
    7. Herter, Karen, 2007. "Residential implementation of critical-peak pricing of electricity," Energy Policy, Elsevier, vol. 35(4), pages 2121-2130, April.
    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. Nakai, Miwa & von Loessl, Victor & Wetzel, Heike, 2024. "Preferences for dynamic electricity tariffs: A comparison of households in Germany and Japan," Ecological Economics, Elsevier, vol. 223(C).
    2. von Loessl, Victor, 2023. "Smart meter-related data privacy concerns and dynamic electricity tariffs: Evidence from a stated choice experiment," Energy Policy, Elsevier, vol. 180(C).
    3. Darshana Rajapaksa & Robert Gifford & Benno Torgler & María A. García-Valiñas & Wasantha Athukorala & Shunsuke Managi & Clevo Wilson, 2019. "Do monetary and non-monetary incentives influence environmental attitudes and behavior? Evidence from an experimental analysis," Post-Print hal-03191523, HAL.
    4. Minseok Jang & Hyun-Cheol Jeong & Taegon Kim & Sung-Kwan Joo, 2021. "Load Profile-Based Residential Customer Segmentation for Analyzing Customer Preferred Time-of-Use (TOU) Tariffs," Energies, MDPI, vol. 14(19), pages 1-12, September.
    5. Lim, Keumju & Lee, Jongsu & Lee, Hyunjoo, 2021. "Implementing automated residential demand response in South Korea: Consumer preferences and market potential," Utilities Policy, Elsevier, vol. 70(C).
    6. Bernadeta Gołębiowska, 2020. "Preferences for demand side management—a review of choice experiment studies," Working Papers 2020-05, Faculty of Economic Sciences, University of Warsaw.

    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. Takanori Ida & Wenjie Wang, 2014. "A Field Experiment on Dynamic Electricity Pricing in Los Alamos:Opt-in Versus Opt-out," Discussion papers e-14-010, Graduate School of Economics Project Center, Kyoto University.
    2. Fumitoshi Mizutani & Takuro Tanaka & Eri Nakamura, 2015. "The Effect of Demand Response on Electricity Consumption in Japan," Discussion Papers 2015-02, Kobe University, Graduate School of Business Administration.
    3. Ahmad Faruqui, Sanem Sergici, and Lamine Akaba, 2014. "The Impact of Dynamic Pricing on Residential and Small Commercial and Industrial Usage: New Experimental Evidence from Connecticut," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
    4. Makena Coffman & Paul Bernstein & Derek Stenclik & Sherilyn Wee & Aida Arik, 2018. "Integrating Renewable Energy with Time Varying Pricing," Working Papers 2018-6, University of Hawaii Economic Research Organization, University of Hawaii at Manoa.
    5. Enrich, Jacint & Li, Ruoyi & Mizrahi, Alejandro & Reguant, Mar, 2024. "Measuring the impact of time-of-use pricing on electricity consumption: Evidence from Spain," Journal of Environmental Economics and Management, Elsevier, vol. 123(C).
    6. Yalcintas, Melek & Hagen, William T. & Kaya, Abidin, 2015. "Time-based electricity pricing for large-volume customers: A comparison of two buildings under tariff alternatives," Utilities Policy, Elsevier, vol. 37(C), pages 58-68.
    7. Heshmati, Almas, 2012. "Survey of Models on Demand, Customer Base-Line and Demand Response and Their Relationships in the Power Market," IZA Discussion Papers 6637, Institute of Labor Economics (IZA).
    8. Almas Heshmati, 2014. "Demand, Customer Base-Line And Demand Response In The Electricity Market: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 28(5), pages 862-888, December.
    9. Anette Boom & Sebastian Schwenen, 2021. "Is real-time pricing smart for consumers?," Journal of Regulatory Economics, Springer, vol. 60(2), pages 193-213, December.
    10. Pébereau, Charles & Remmy, Kevin, 2023. "Barriers to real-time electricity pricing: Evidence from New Zealand," International Journal of Industrial Organization, Elsevier, vol. 89(C).
    11. Christian Gambardella & Michael Pahle & Wolf-Peter Schill, 2016. "Do Benefits from Dynamic Tariffing Rise? Welfare Effects of Real-Time Pricing under Carbon-Tax-Induced Variable Renewable Energy Supply," Discussion Papers of DIW Berlin 1621, DIW Berlin, German Institute for Economic Research.
    12. Gambardella, Christian & Pahle, Michael, 2018. "Time-varying electricity pricing and consumer heterogeneity: Welfare and distributional effects with variable renewable supply," Energy Economics, Elsevier, vol. 76(C), pages 257-273.
    13. Herter, Karen & Wayland, Seth, 2010. "Residential response to critical-peak pricing of electricity: California evidence," Energy, Elsevier, vol. 35(4), pages 1561-1567.
    14. Eri Nakamura & Fumitoshi Mizutani, 2019. "Necessary demand and extra demand of public utility product: identification using the stochastic frontier model," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 46(1), pages 45-64, March.
    15. Bajo-Buenestado, Raúl, 2017. "Welfare implications of capacity payments in a price-capped electricity sector: A case study of the Texas market (ERCOT)," Energy Economics, Elsevier, vol. 64(C), pages 272-285.
    16. Han Wang & Damien Fay & Kenneth N. Brown & Liam Kilmartin, 2016. "Modelling revenue generation in a dynamically priced mobile telephony service," Telecommunication Systems: Modelling, Analysis, Design and Management, Springer, vol. 62(4), pages 711-734, August.
    17. Daniel Adelman & Canan Uçkun, 2019. "Dynamic Electricity Pricing to Smart Homes," Operations Research, INFORMS, vol. 67(6), pages 1520-1542, November.
    18. Adela Conchado & Pedro Linares, 2010. "The Economic Impact of Demand-Response Programs on Power Systems. A survey of the State of the Art," Working Papers 02-2010, Economics for Energy.
    19. Katrina Jessoe & David Rapson, 2014. "Knowledge Is (Less) Power: Experimental Evidence from Residential Energy Use," American Economic Review, American Economic Association, vol. 104(4), pages 1417-1438, April.
    20. Cl'emence Alasseur & Ivar Ekeland & Romuald Elie & Nicol'as Hern'andez Santib'a~nez & Dylan Possamai, 2017. "An adverse selection approach to power pricing," Papers 1706.01934, arXiv.org, revised Sep 2019.

    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:spr:jecstr:v:6:y:2017:i:1:d:10.1186_s40008-017-0064-0. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.