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Power Politics: Electoral Cycles in German Electricity Prices

Author

Listed:
  • Englmaier, Florian
  • Roider, Andreas
  • Stowasser, Till
  • Hinreiner, Lisa

Abstract

We provide evidence that German public energy providers, over which municipality-level politicians hold substantial sway, systematically adjust the pricing of electric energy in response to local electoral cycles. The documented pattern is in line with both, an artificial reduction in prices before an election that needs to be countermanded by future price increases, and an artificial postponement of market-driven price increases until after the election is over.

Suggested Citation

  • Englmaier, Florian & Roider, Andreas & Stowasser, Till & Hinreiner, Lisa, 2017. "Power Politics: Electoral Cycles in German Electricity Prices," Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168267, Verein für Socialpolitik / German Economic Association.
  • Handle: RePEc:zbw:vfsc17:168267
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    File URL: https://www.econstor.eu/bitstream/10419/168267/1/VfS-2017-pid-3503.pdf
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    References listed on IDEAS

    as
    1. Florian Englmaier & Till Stowasser, 2017. "Electoral Cycles in Savings Bank Lending," Journal of the European Economic Association, European Economic Association, vol. 15(2), pages 296-354.
    2. Rodrigo M. S. Moita & Claudio Paiva, 2013. "Political Price Cycles in Regulated Industries: Theory and Evidence," American Economic Journal: Economic Policy, American Economic Association, vol. 5(1), pages 94-121, February.
    3. Matthew Doyle & Corrado Di Maria & Ian Lange & Emiliya Lazarova, 2016. "Electoral incentives and firm behavior: Evidence from U.S. power plant pollution abatement," University of East Anglia School of Economics Working Paper Series 2016-11, School of Economics, University of East Anglia, Norwich, UK..
    4. Richard T. Boylan, 2016. "Power to the People: Does Ownership Type Influence Electricity Service?," Journal of Law and Economics, University of Chicago Press, vol. 59(2), pages 441-476.
    5. Joshua D. Angrist & Jörn-Steffen Pischke, 2009. "Mostly Harmless Econometrics: An Empiricist's Companion," Economics Books, Princeton University Press, edition 1, number 8769.
    6. Alberto Alesina & Nouriel Roubini & Gerald D. Cohen, 1997. "Political Cycles and the Macroeconomy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262510944, January.
    7. Christina Schneider, 2010. "Fighting with one hand tied behind the back: political budget cycles in the West German states," Public Choice, Springer, vol. 142(1), pages 125-150, January.
    8. Englmaier, Florian & Stowasser, Till, 2017. "Electoral cycles in savings bank lending," Munich Reprints in Economics 49931, University of Munich, Department of Economics.
    9. Asim Ijaz Khwaja & Atif Mian, 2005. "Do Lenders Favor Politically Connected Firms? Rent Provision in an Emerging Financial Market," The Quarterly Journal of Economics, Oxford University Press, vol. 120(4), pages 1371-1411.
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    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H44 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Goods: Mixed Markets
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H76 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other Expenditure Categories
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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