Pass-through as a test for market power: An application of Solar Subsidies
Jacquelyn Pless () and
Arthur A. van Benthem
No 212, OxCarre Working Papers from Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford
We formalize pass-through over-shifting as a simple yet under-utilized test for market power. We apply this test in the market for solar energy. Speci cally, we estimate the pass-through of solar subsidies to solar system prices using rich micro-level transaction and subsidy data from California. Buyers of solar systems capture nearly the full subsidy, while there is more-than-complete pass-through to lessees. We conclude that solar markets are imperfectly competitive by ruling out alternative explanations for over-shifting, and reinforce this conclusion with a test of solar demand curvature. This procedure can serve to detect market power beyond the solar market.
Keywords: solar subsidy; pass-through; over-shifting; demand curvature; market power; third-party ownership; buy vs. lease (search for similar items in EconPapers)
JEL-codes: H22 Q42 Q48 Q58 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-ene and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
https://www.economics.ox.ac.uk/materials/OxCarre/R ... oxcarrerp2018212.pdf (application/pdf)
Working Paper: Pass-Through as a Test for Market Power: An Application to Solar Subsidies (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:oxf:oxcrwp:212
Access Statistics for this paper
More papers in OxCarre Working Papers from Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford Contact information at EDIRC.
Bibliographic data for series maintained by Melis Boya ().