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- Title
Welfare Effects of Nonlinear Electricity Pricing.
- Authors
You, Jung S.; So Yeong Lim
- Abstract
Block pricing is widespread among electricity and water utilities to protect lowincome households and to encourage energy conservation through higher marginal prices. However, whether a block pricing system achieves those objectives is controversial. In this article, we analyze the impact of alternative electricity pricing systems on the welfare of consumers for the case of residential electricity block pricing in Korea. To do this, we first develop a theoretical model to compute each household's welfare change under alternative pricing systems. Then, we estimate the residential electricity demand function and compute every household's electricity consumption and expenses under alternative pricing systems. Finally, we compute each household's welfare change and social welfare to draw policy implications.
- Subjects
NONLINEAR pricing; ELECTRIC rates; PRICE regulation; ELECTRIC power consumption; SOCIAL services
- Publication
Energy Journal, 2017, Vol 38, Issue 1, p195
- ISSN
0195-6574
- Publication type
Article
- DOI
10.5547/01956574.38.1.jyou