Do Residential Customers Respond to Hourly Prices? Evidence from a Dynamic Pricing Experiment
- (pp. 83-87)
Abstract
This paper uses the results of a dynamic pricing experiment for households in the District of Columbia to determine whether the reduction in demand associated with an hourly price signal is economically different from the demand reduction associated with an equivalent price signal that is four times longer in duration. For both regular and all-electric customers, the percentage demand reduction associated with a given percentage increase in the hourly price is approximately equal to the percentage demand reduction associated with the same percentage price increase of a much longer duration.Citation
Wolak, Frank A. 2011. "Do Residential Customers Respond to Hourly Prices? Evidence from a Dynamic Pricing Experiment." American Economic Review, 101 (3): 83-87. DOI: 10.1257/aer.101.3.83JEL Classification
- D12 Consumer Economics: Empirical Analysis
- L11 Production, Pricing, and Market Structure; Size Distribution of Firms
- L94 Electric Utilities
- Q41 Energy: Demand and Supply