Competition and contracts in the Nordic residential electricity markets

Stephen Littlechild

doi:10.1016/j.jup.2006.03.003

Competition and contracts in the Nordic residential electricity markets

Utilities Policy ◽

10.1016/j.jup.2006.03.003 ◽

2006 ◽

Vol 14 (3) ◽

pp. 135-147 ◽

Cited By ~ 25

Author(s):

Stephen Littlechild

Keyword(s):

Electricity Markets ◽

Residential Electricity

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A Consumer Dissatisfaction Model Linking Dynamic Pricing With Shifted Product-Use in Residential Electricity Markets

10.1115/1.0002134v ◽

2021 ◽

Author(s):

Samuel Dunbar ◽

Scott Ferguson

Keyword(s):

Electricity Markets ◽

Dynamic Pricing ◽

Product Use ◽

Residential Electricity ◽

Consumer Dissatisfaction

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Misunderstanding Nonlinear Prices: Evidence from a Natural Experiment on Residential Electricity Demand

American Economic Journal Economic Policy ◽

10.1257/pol.20180061 ◽

2020 ◽

Vol 12 (3) ◽

pp. 433-461

Author(s):

Blake Shaffer

Keyword(s):

British Columbia ◽

Economic Policy ◽

Electricity Markets ◽

Natural Experiment ◽

Electricity Demand ◽

Welfare Loss ◽

Average Price ◽

Residential Electricity ◽

Marginal Price

This paper examines how consumers respond to nonlinear prices. Exploiting a natural experiment with electricity consumers in British Columbia, I find evidence that some households severely misunderstand nonlinear prices—incorrectly perceiving that the marginal price applies to all consumption, not simply the last unit. While small in number, the exaggerated responses by these households have a large effect in aggregate, masking an otherwise predominant response to average price. Largely unexplored in the literature, this type of misunderstanding has important economic, policy, and methodological implications beyond electricity markets. I estimate the welfare loss for these households to be the equivalent of 10 percent of annual electricity expenditure. (JEL D12, L11, L94, Q41)

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