Residential Electricity Demand under Time-of-Use Pricing and Increasing Block Pricing: An Analysis Based on DCC Model
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| Title | Residential Electricity Demand under Time-of-Use Pricing and Increasing Block Pricing: An Analysis Based on DCC Model
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| Author | Zhang Xinzhu and Liu Zimin |
| Organization | Research Center for Regulation and Competition at Chinese Academy of SocialScience；School of Economics and Management of Southwest University |
| Email | xzzhang@public.bta.net.cn；ziminliu@126.com |
| Key Words | Residential Electricity Demand; Increasing Block Pricing; Peak Load Pricing; Discrete/Continuous Choice Model; Two-Error Model |
| Abstract | Using residential electricity consumption and household survey data we analyze residential electricity demand under time-of-use pricing cum increasing block pricing (IBP) based on the two-error discrete/continuous choice model. We first convert the mixed pricing structure into a new IBP system, then justify the specification of an DCC model by showing the aggregating behavior around kink points, and finally, estimate the two-error DCC model. Our conclusion is that IBP increases price elasticity significantly with middle-low income households having higher price elasticity and middle-high income households have higher income elasticity and bigger heterogeneity error. Our results contribute to a systematic assessment of IBP implementation in electricity and other sectors as well. |
| Serial Number | WP650 |
| Time | 2014-08-12 |
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