Abstract

http://ssrn.com/abstract=870633
 
 

References (21)



 
 

Citations (11)



 


 



Consumption under Noisy Price Signals: A Study of Electricity Retail Rate Deregulation in San Diego


James B. Bushnell


University of California - Energy Institute

Erin T. Mansur


Dartmouth College - Tuck School of Business; National Bureau of Economic Research (NBER)


Journal of Industrial Economics, Vol. 53, No. 4, pp. 493-513, December 2005

Abstract:     
Utility services employ nonlinear tariffs that attempt to convey information on cost convexities. This paper examines how customers respond to noisy and volatile tariffs by measuring deregulated retail rates' impact on electricity consumption in San Diego. When rates doubled in 2000, consumers appear to have reacted more to recent past bills than to current price information. By summer's end, we find consumption fell 6% while lagging price increases. Even months after the utility restored low historic rates customers continued curtailing demand. We conclude that rate structures relying upon lagged wholesale price averages produce delayed responses to scarcities or high costs.

Number of Pages in PDF File: 21

Accepted Paper Series





Date posted: January 3, 2006  

Suggested Citation

Bushnell, James B. and Mansur, Erin T., Consumption under Noisy Price Signals: A Study of Electricity Retail Rate Deregulation in San Diego. Journal of Industrial Economics, Vol. 53, No. 4, pp. 493-513, December 2005. Available at SSRN: http://ssrn.com/abstract=870633 or http://dx.doi.org/10.1111/j.1467-6451.2005.00267.x

Contact Information

James B. Bushnell (Contact Author)
University of California - Energy Institute ( email )
Berkeley, CA 94720
United States
Erin T. Mansur
Dartmouth College - Tuck School of Business ( email )
Hanover, NH 03755
United States
603 646 2398 (Phone)
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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References:  21
Citations:  11

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