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Households' response to changes in electricity pricing schemes: Bridging microeconomic and engineering principles

Walid Matar ()

Energy Economics, 2018, vol. 75, issue C, 300-308

Abstract: This paper presents a computational take on households' response to price changes. Many studies use assumptions (i.e., price elasticities) that were estimated using historical information; however, if a price change has not been experienced in the past, the response may not be statistically predicted. While other papers have explored price response behavior internally through microeconomic principles, many factors affect a household's electricity use, including the construction of the dwelling, outdoor air temperature, and efficiency of the air conditioner. We have superimposed a physical model, which determines hourly power loads, with a utility maximization component.

Keywords: Demand response; Electricity use; Households; Physical factors; Electricity price (search for similar items in EconPapers)
JEL-codes: B21 B41 C00 C61 C63 D11 (search for similar items in EconPapers)
Date: 2018
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DOI: 10.1016/j.eneco.2018.08.028

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Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant

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