Does Energy Consumption Respond to Price Shocks?: Evidence from a Regression-Discontinuity Design
Paulo Bastos,
Lucio Castro,
Julian Cristia () and
Carlos Scartascini
No 3088, IDB Publications (Working Papers) from Inter-American Development Bank
Abstract:
This paper exploits unique features of a recently introduced tariff schedule for natural gas in Buenos Aires to estimate the short-run impact of price shocks on residential energy utilization. The schedule induces a non-linear and non-monotonic relationship between households' accumulated consumption and unit prices, thus generating an exogenous source of variation in perceived prices, which is exploited in a regression-discontinuity design. The estimates reveal that a price increase in the utility bill received by consumers causes a substantial and prompt decline in gas consumption. Hence they suggest that policy interventions via the price mechanism, such as price caps and subsidies, are powerful instruments to influence residential energy utilization patterns, even within a short time span.
Keywords: IDB-WP-234; Energy consumption; Elasticity of demand; Regulation of public utilities; Regression discontinuity design; Public policy (search for similar items in EconPapers)
JEL-codes: D12 L51 L95 Q41 Q48 (search for similar items in EconPapers)
Date: 2011-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)
Downloads: (external link)
https://publications.iadb.org/publications/english ... ontinuity-Design.pdf (application/pdf)
Related works:
Journal Article: Does Energy Consumption Respond to Price Shocks? Evidence from a Regression-Discontinuity Design (2015) 
Working Paper: Does energy consumption respond to price shocks ? evidence from a regression-discontinuity design (2014) 
Working Paper: Does Energy Consumption Respond to Price Shocks? Evidence from a Regression-Discontinuity Design (2011) 
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:idb:brikps:3088
Access Statistics for this paper
More papers in IDB Publications (Working Papers) from Inter-American Development Bank Contact information at EDIRC.
Bibliographic data for series maintained by Felipe Herrera Library ().