The Electric Gini: Income Redistribution through Energy Prices

Arik Levinson and Emilson Silva

American Economic Journal: Economic Policy, 2022, vol. 14, issue 2, 341-65

Abstract: In theory, regulators concerned about inequality will deviate from efficient two-part tariffs, charging lower-than-efficient fixed monthly fees and higher-than-efficient per-kilowatt-hour prices. To quantify that relationship, we develop a measure of the redistributive extent of utility tariffs: the "electric Gini." Utilities with higher electric Ginis shift more costs from households using relatively little electricity to households using more. In practice, US utilities whose ratepayers have more unequal incomes have higher electric Ginis. But electricity demand is only loosely correlated with income, which means that electricity prices are an indirect and ineffective policy for countering income inequality.

JEL-codes: D31 L11 L94 L98 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (8)

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Working Paper: The Electric Gini: Income Redistribution through Energy Prices (2019)
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DOI: 10.1257/pol.20200543

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