The Effects of Dynamic Pricing of Electric Power on Consumer Behavior: A Propensity Score Analysis for Empirical Study on Nushima Island, Japan

Thanh Tam Ho, Sarana Shinkuma and Koji Shimada
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Thanh Tam Ho: Graduate School of Economics, Ritsumeikan University, 1-1-1 Noji-Higashi, Kusatsu, Shiga 525-8577, Japan
Sarana Shinkuma: Faculty of Economics, Ritsumeikan University, 1-1-1 Noji-Higashi, Kusatsu, Shiga 525-8577, Japan

Energies, 2018, vol. 11, issue 8, 1-22

Abstract: This study aimed to investigate the change of consumer behavior in electric power consumption after the application of dynamic pricing via real-time feedback. Afield experiment of dynamic pricing was carried out on Nushima Island, which is located in Hyogo Prefecture in central Japan. The panel data of hourly electric power consumption among 50 households (including 22 control households and 28 treated households) were collected from a baseline survey (14 days before the dynamic pricing experiment was conducted) and during the 14-day experimental period. Propensity score analysis with local linear matching was employed to analyze the average treatment effects of dynamic pricing on consumer behavior. The results report that dynamic pricing plays a crucial role in reducing consumers’ electric power consumption—by 9.6% compared to the pre-experimental period.

Keywords: dynamic pricing; demand response; propensity score analysis; local linear matching (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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