Dr. Bowei Guo recently had a paper published in the Journal of Environmental Economics and Management. The paper titled‘ The spillover effect of peak pricing’.

Abstract

Understanding consumer behaviours is important in designing dynamic tariffs, which are usually considered the first-best solution when the conventional flat tariff does not reflect the varying cost of electricity generation. I estimate households’ own- and cross-price elasticities using dataset from a smart metering project, and investigate which household specific characteristics determine the impact of peak prices on electricity consumption. I find peak prices (17:00– 20:00) reduce peak and post-peak consumption (20:00–23:00), indicating a spillover effect of peak prices. The underlying mechanisms that could be generating the spillover effect have been further discussed and investigated. Finally, I estimate dynamic tariffs’ distributional and welfare effects, and demonstrate that the spillover effect is crucial in determining the cost effectiveness of a smart metering programme.

Other information

Publication Date:2023

Journal: Journal of Environmental Economics and Management

DOI: https://doi.org/10.1016/j.jeem.2023.102845

Read the paper here.