Household Response to Time-Varying Electricity Prices

Matthew Harding () and Steven Sexton ()
Additional contact information
Matthew Harding: Department of Economics, University of California, Irvine, California 92697
Steven Sexton: Sanford School of Public Policy, Duke University, Durham, North Carolina 27708

Annual Review of Resource Economics, 2017, vol. 9, issue 1, 337-359

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.

Keywords: electricity; dynamic prices; time-of-use rate; demand response; peak load; automation (search for similar items in EconPapers)
JEL-codes: D03 Q41 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (26)

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