Do Residential Customers Respond to Hourly Prices? Evidence from a Dynamic Pricing Experiment
American Economic Review · 2011 · Volume 101 · Issue 3
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.
Keywords
Consumer Economics: Empirical Analysis, Production, Pricing, and Market Structure, Size Distribution of Firms, Electric Utilities, Energy: Demand and Supply
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