EconPapers    
Economics at your fingertips  
 

The Redistributional Impact of Nonlinear Electricity Pricing

Severin Borenstein ()

American Economic Journal: Economic Policy, 2012, vol. 4, issue 3, 56-90

Abstract: Electricity regulators often mandate increasing-block pricing (IBP)—i.e., marginal price increases with the customer's average daily usage—to protect low-income households from rising costs. IBP has no cost basis, raising a classic conflict between efficiency and distributional goals. Combining household-level utility billing data with census data on income, I find that IBP in California results in modest wealth redistribution, but creates substantial deadweight loss relative to the transfers. I also show that a common approach to studying income distribution effects by using median household income within census block groups may be misleading. (JEL D31, L11, L51, L94, L98, Q41, Q48)

JEL-codes: D31 L11 L51 L94 L98 Q41 Q48 (search for similar items in EconPapers)
Date: 2012
Note: DOI: 10.1257/pol.4.3.56
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (29) Track citations by RSS feed

Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/pol.4.3.56 (application/pdf)
http://www.aeaweb.org/aej/pol/data/2010-0085_data.zip (application/zip)
http://www.aeaweb.org/aej/pol/app/2010-0085_app.pdf (application/pdf)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: The Redistributional Impact of Non-linear Electricity Pricing (2010) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aejpol:v:4:y:2012:i:3:p:56-90

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Journal: Economic Policy is currently edited by Matthew Shapiro

More articles in American Economic Journal: Economic Policy from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().

 
Page updated 2019-11-16
Handle: RePEc:aea:aejpol:v:4:y:2012:i:3:p:56-90