Impacts of consumers' electricity price misperceptions
No 105, MEP Discussion Papers from University of Münster, Münster Center for Economic Policy (MEP)
Empirical findings indicate that a large share of households misperceives electricity prices and is not able to make deliberate choices in energy service consumption, which leads to biased consumption decisions and thus to inefficient energy use. To investigate the impact of misperceived electricity prices on the derived demand for electricity, the economy and domestic CO2 emissions, we make use of a computable general equilibrium (CGE) model. The model allows us to take the narrow interweaving of production and consumption sectors into account to investigate the repercussions on supply and demand in Germany and Europe. Providing information on electricity prices or the most efficient utilisation can stimulate reductions in electricity consumption if households are aware of possible trade-offs. However, if consumers perceive the electricity price to be much higher than it actually is, providing information on the true electricity price might turn out to be counter-productive in terms of electricity consumption and domestic CO2 emissions.
Keywords: residential energy consumption; energy efficiency; behavioural inefficiency; electricity price misperception; consumer inattention (search for similar items in EconPapers)
JEL-codes: D58 Q41 Q43 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene, nep-eur and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
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:zbw:cawmdp:105
Access Statistics for this paper
More papers in MEP Discussion Papers from University of Münster, Münster Center for Economic Policy (MEP) Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().