Pricing Schemes for Regulated Enterprises and Their Welfare Implications in the Case of Electricity

Dionissis Dimopoulos

Bell Journal of Economics, 1981, vol. 12, issue 1, 185-200

Abstract: This paper examines the implications of implementing different pricing schemes--average cost pricing, two-part tariff, declining block, inverted rates--for electricity. A model is developed which can be applied to any public or regulated enterprise which maximizes welfare subject to a budget constraint. The model puts emphasis on deriving optimal pricing rules that balance efficiency and distributional equity considerations. It is found that welfare improvements resulting from lifeline pricing will most likely be of no practical significance, and that, contrary to what is generally believed, it is very likely that declining block pricing can achieve higher levels of welfare.

Date: 1981
References: Add references at CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://links.jstor.org/sici?sici=0361-915X%2819812 ... O%3B2-D&origin=repec full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

Related works:
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:rje:bellje:v:12:y:1981:i:spring:p:185-200

Ordering information: This journal article can be ordered from
https://editorialexp ... i-bin/rje_online.cgi

Access Statistics for this article

More articles in Bell Journal of Economics from The RAND Corporation
Bibliographic data for series maintained by ().