Household Response to Time-Varying Electricity Prices

Posted: 27 Oct 2017

See all articles by Matthew Harding

Matthew Harding

University of California, Irvine

Steven Sexton

Duke University Sanford School of Public Policy

Date Written: October 2017

Abstract

The diffusion of smart metering technology and intermittent renewable electricity generation capacity makes the deployment of time-varying electricity rates increasingly feasible and important to the functioning of electricity grids. Such rates, which economists advocate to more efficiently match supply and demand, remain rare, though experiments assessing consumer responses are not. This review synthesizes evaluations of these experiments in the context of a theory of consumer inattention and adjustment costs that posits a role for automation technology to boost the short-run price elasticity of demand and affect demand-side reductions that can lower generation costs.

Suggested Citation

Harding, Matthew and Sexton, Steven, Household Response to Time-Varying Electricity Prices (October 2017). Annual Review of Resource Economics, Vol. 9, Issue 1, pp. 337-359, 2017. Available at SSRN: https://ssrn.com/abstract=3060467 or http://dx.doi.org/10.1146/annurev-resource-100516-053437

Matthew Harding (Contact Author)

University of California, Irvine ( email )

Campus Drive
Irvine, CA 62697-3125
United States

Steven Sexton

Duke University Sanford School of Public Policy ( email )

201 Science Drive
Box 90312
Durham, NC 27708-0239
United States

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