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Breaking Routine for Energy Savings: An Appliance-level Analysis of Small Business Behavior under Dynamic Prices

Jiyong Eom and Frank A. Wolak

No 27263, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Small businesses are typically committed to providing a positive customer experience and therefore may exhibit a response to dynamic electricity prices different from residential or industrial customers. We conduct a field experiment to determine the extent to which small businesses respond through re-configuration of typical routines throughout the experiment period versus through adjustments to specific dynamic pricing events. Using a customer-level survey of appliance ownership, we estimate the hourly response patterns of individual appliances to participation in the experiment versus individual dynamic pricing events. Consistent with our re-configuration hypothesis, small businesses primarily curtail electricity usage throughout the experiment period, although we also find a small imprecisely estimated response to dynamic pricing events on top of the re-configuration effect. Appliances not critical to a positive customer experience such as dish dryers, food storage units, lights, electric motors & pumps, and industrial heaters are the major sources of the energy savings from the re-configuration actions of these small businesses.

JEL-codes: Q4 Q41 (search for similar items in EconPapers)
Date: 2020-05
New Economics Papers: this item is included in nep-ene, nep-exp and nep-reg
Note: EEE
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