IDEAS home Printed from https://ideas.repec.org/a/ucp/jaerec/doi10.1086-705798.html
   My bibliography  Save this article

Peaking Interest: How Awareness Drives the Effectiveness of Time-of-Use Electricity Pricing

Author

Listed:
  • Brian C. Prest

Abstract

I apply and extend a new machine-learning method to estimate heterogeneous electricity demand responses to time-varying prices in an experiment on Irish households. The most important source of heterogeneity is consumer awareness, followed by information provision and baseline consumption. In-home electricity monitors doubled responses. Other household characteristics like demographics, appliance ownership, or house characteristics, were not predictive of heterogeneous effects. Surprisingly, households appeared to violate a central law of demand theory: while they responded to the existence of a price change, they were extremely insensitive to the magnitude of the price change. This suggests that “getting the prices right” is less important than getting consumers to pay attention in the first place.

Suggested Citation

  • Brian C. Prest, 2020. "Peaking Interest: How Awareness Drives the Effectiveness of Time-of-Use Electricity Pricing," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 7(1), pages 103-143.
    • Handle: RePEc:ucp:jaerec:doi:10.1086/705798
    DOI: 10.1086/705798
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1086/705798
    Download Restriction: Access to the online full text or PDF requires a subscription.
    File URL: http://dx.doi.org/10.1086/705798
    Download Restriction: Access to the online full text or PDF requires a subscription.
    File URL: https://libkey.io/10.1086/705798?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jing Liang & Yueming Qiu & Bo Xing, 2021. "Social Versus Private Benefits of Energy Efficiency Under Time-of-Use and Increasing Block Pricing," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 78(1), pages 43-75, January.
    2. Puja Singhal, 2020. "Inform Me When It Matters: Cost Salience, Energy Consumption, and Efficiency Investments," Discussion Papers of DIW Berlin 1891, DIW Berlin, German Institute for Economic Research.
    3. Axenbeck, Janna & Berner, Anne & Kneib, Thomas, 2022. "What drives the relationship between digitalization and industrial energy demand? Exploring firm-level heterogeneity," ZEW Discussion Papers 22-059, ZEW - Leibniz Centre for European Economic Research.
    4. Enrich, Jacint & Li, Ruoyi & Mizrahi, Alejandro & Reguant, Mar, 2024. "Measuring the impact of time-of-use pricing on electricity consumption: Evidence from Spain," Journal of Environmental Economics and Management, Elsevier, vol. 123(C).
    5. Lang, Corey & Qiu, Yueming (Lucy) & Dong, Luran, 2023. "Increasing voluntary enrollment in time-of-use electricity rates: Findings from a survey experiment," Energy Policy, Elsevier, vol. 173(C).
    6. Gianluca Trotta & Kirsten Gram-Hanssen & Pernille Lykke Jørgensen, 2020. "Heterogeneity of Electricity Consumption Patterns in Vulnerable Households," Energies, MDPI, vol. 13(18), pages 1-17, September.
    7. Pates, Nicholas J. & Hendricks, Nathan P., 2018. "Estimating Heterogeneous Corn Price Response in the United States," 2018 Annual Meeting, August 5-7, Washington, D.C. 274393, Agricultural and Applied Economics Association.
    8. Eoghan O'Neill & Melvyn Weeks, 2018. "Causal Tree Estimation of Heterogeneous Household Response to Time-Of-Use Electricity Pricing Schemes," Papers 1810.09179, arXiv.org, revised Oct 2019.
    9. Singhal, Puja, 2024. "Inform me when it matters: Cost salience, energy consumption, and efficiency investments," Energy Economics, Elsevier, vol. 133(C).
    10. Brewer, Dylan, 2023. "Household responses to winter heating costs: Implications for energy pricing policies and demand-side alternatives," Energy Policy, Elsevier, vol. 177(C).
    11. Singhal, Puja & Pahle, Michael & Kalkuhl, Matthias & Levesque, Antoine & Sommer, Stephan & Berneiser, Jessica, 2022. "Beyond good faith: Why evidence-based policy is necessary to decarbonize buildings cost-effectively in Germany," Energy Policy, Elsevier, vol. 169(C).
    12. Joshua Blonz & Karen Palmer & Casey J. Wichman & Derek C. Wietelman, 2025. "Smart Thermostats, Automation, and Time-Varying Prices," American Economic Journal: Applied Economics, American Economic Association, vol. 17(1), pages 90-125, January.
    13. Hortay, Olivér & Kökény, László, 2020. "A villamosenergia-fogyasztás elhalasztásával kapcsolatos lakossági attitűd felmérése Magyarországon [A survey of popular attitudes to deferment of electricity consumption in Hungary]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(7), pages 657-687.
    14. Jesse Burkhardt & Kenneth Gillingham & Praveen K. Kopalle, 2019. "Experimental Evidence on the Effect of Information and Pricing on Residential Electricity Consumption," NBER Working Papers 25576, National Bureau of Economic Research, Inc.
    15. O'Neill, E. & Weeks, M., 2018. "Causal Tree Estimation of Heterogeneous Household Response to Time-Of-Use Electricity Pricing Schemes," Cambridge Working Papers in Economics 1865, Faculty of Economics, University of Cambridge.
    16. Blonz, Joshua & Palmer, Karen & Wichman, Casey & Wietelman, Derek C., 2021. "Smart Thermostats, Automation, and Time-Varying Prices," RFF Working Paper Series 21-20, Resources for the Future.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucp:jaerec:doi:10.1086/705798. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Journals Division (email available below). General contact details of provider: https://www.journals.uchicago.edu/JAERE .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.