Consumer Response to Time Varying Prices for Electricity

Williams, John; Thorsnes, Paul; Lawson, Rob

Consumer Response to Time Varying Prices for Electricity

Lawson, Rob; Thorsnes, Paul; Williams, John

Cite this item: Lawson, R., Thorsnes, P., & Williams, J. (2011). Consumer Response to Time Varying Prices for Electricity (Economics Discussion Papers Series No. 1116). University of Otago. Retrieved from http://hdl.handle.net/10523/2084

Permanent link to OUR Archive version: http://hdl.handle.net/10523/2084

Date: 2011-11-01

Publisher: University of Otago

Series: Economics Discussion Papers Series

Series number: 1116

ISSN: 1178-2293

Keywords: Electricity pricing; Time of Use; Price elasticity

Research Type: Discussion Paper

Languages: English

Abstract:

We report new experimental evidence of the household response to weekday differentials in peak and off-peak electricity prices. The data come from Auckland, New Zealand, where peak residential electricity consumption occurs in winter for heating. Peak/off-peak price differentials ranged over four randomly-selected groups from 1.0 to 3.5. On average, there was no response except in winter. In winter, participant households reduced electricity consumption by at least 10%, took advantage of lower off-peak prices but did not respond to the peak price differentials. Response varied with house and household size, time spent away from home, and whether water was heated with electricity.

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