Time-of-use prices and electricity demand

Allowing for selection bias in experimental data

John Ham, Dean C. Mountain, M. W.Luke Chan

    Research output: Contribution to journalArticle

    Abstract

    We address self-selection in time-of-use experiments. Our methodology is especially appropriate when (i) theory does not provide an exclusion restriction between the participation and consumption equations or (ii) the demand system contains a large number of parameters estimated from a difficult objective function. We find that correcting for selection bias is important. Generally, small commercial establishments are not very responsive to time-of-use pricing. However, for some subgroups (such as those with neither electric heating nor air conditioning), significant responsiveness occurs given a sufficiently short peak period and a sufficiently large peak/off-peak price differential.

    Original languageEnglish (US)
    JournalRAND Journal of Economics
    Volume28
    DOIs
    StatePublished - Jan 1 1997

    Fingerprint

    Electricity demand
    Selection bias
    Air conditioning
    Responsiveness
    Demand systems
    Self-selection
    Heating
    Pricing
    Methodology
    Exclusion
    Participation
    Experiment
    Objective function

    ASJC Scopus subject areas

    • Economics and Econometrics

    Cite this

    Time-of-use prices and electricity demand : Allowing for selection bias in experimental data. / Ham, John; Mountain, Dean C.; Chan, M. W.Luke.

    In: RAND Journal of Economics, Vol. 28, 01.01.1997.

    Research output: Contribution to journalArticle

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