Do electricity prices matter? Plant-level evidence from German manufacturing

Andreas Gerster

No 672, Ruhr Economic Papers from RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen

Abstract: In many countries, the transition process towards a low-carbon economy has been associated with increasing electricity prices. Microeconometric evaluations of the causal impact of electricity price changes on plant-level outcomes are rare, though. By exploiting local randomization induced by thresholds in exemption rules, we estimate the local average treatment effects of electricity levy exemptions using a fuzzy regression discontinuity (RD) design. The results indicate that exempted German manufacturing plants increase electricity use substantially and substitute it for fossil fuels, while we do not find evidence for short-run effects on gross output, exports and employment.

Keywords: environmental taxation; electricity prices; manufacturing; regression discontinuity design (search for similar items in EconPapers)
JEL-codes: D22 H23 L60 Q41 Q48 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-ene, nep-eur and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:rwirep:672

DOI: 10.4419/86788779

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