American Economic Review: Vol. 102 No. 3 (May 2012)


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Dynamic Pricing of Electricity

Article Citation

Joskow, Paul L., and Catherine D. Wolfram. 2012. "Dynamic Pricing of Electricity." American Economic Review, 102(3): 381-85.

DOI: 10.1257/aer.102.3.381


As both a regulator and an academic, Fred Kahn argued that end-use electricity consumers should face prices that reflect the time-varying marginal costs of generating electricity. This has been very slow to happen in the US, even in light of recent technological advances that have lowered costs and improved functionality for meters and automated demand response technologies. We describe these recent developments and discuss the remaining barriers to the proliferation of time-varying electricity pricing.

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Joskow, Paul L. (Alfred P. Sloan Foundation, New York, NY)
Wolfram, Catherine D. (U CA, Berkeley)

JEL Classifications

L11: Production, Pricing, and Market Structure; Size Distribution of Firms
L94: Electric Utilities
L98: Industry Studies: Utilities and Transportation: Government Policy
Q41: Energy: Demand and Supply

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