Do Consumers Respond to Marginal or Average Price? Evidence from Nonlinear Electricity Pricing

• 成果类型: Article
• 署名作者: Ito, Koichiro
• 署名单位: Boston University; National Bureau of Economic Research
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.104.2.537
• 发表日期: 2014
• 页码: 537-563
• 关键词: information suppression; shrouded attributes; Water demand; tax; elasticities; econometrics; consumption; SALIENCE; taxation; micro

摘要

Nonlinear pricing and taxation complicate economic decisions by creating multiple marginal prices for the same good. This paper provides a framework to uncover consumers' perceived price of nonlinear price schedules. I exploit price variation at spatial discontinuities in electricity service areas, where households in the same city experience substantially different nonlinear pricing. Using household-level panel data from administrative records, I find strong evidence that consumers respond to average price rather than marginal or expected marginal price. This suboptimizing behavior makes nonlinear pricing unsuccessful in achieving its policy goal of energy conservation and critically changes the welfare implications of nonlinear pricing. (JEL D12, L11, L94, L98, Q41)