Working Paper: NBER ID: w9986
Authors: Peter C. Reiss; Matthew W. White
Abstract: We study the electricity consumption of San Diego-area households following a series of price changes and related events during California's energy crisis in 2000-01. The analysis uses a five-year panel of disaggregate billing and weather data for a random sample of 70,000 households. In contrast to prior work, these data allow us to proceed without behavioral assumptions regarding a consumer's knowledge of energy prices. We find that after a rapid price increase in summer 2000, consumption fell substantially over about 60 days, averaging 12% per household; consumption then rebounded to within 3% of pre-crisis levels after a price cap was imposed. Under the price cap public appeals for energy conservation and a remunerative voluntary conservation program had significant, but transitory, effects. Further, a large share of households reduced electricity consumption substantially (over 10%) but saved small monetary amounts ($10 or less). Overall, the results indicate consumers may be far more responsive to pecuniary and non-pecuniary incentives for altering their energy use than is commonly believed.
Keywords: No keywords provided
JEL Codes: D1; L5; L9
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| price increase (D49) | decrease in electricity consumption (Q41) |
| price cap (D41) | decrease in electricity consumption (Q41) |
| public appeals for energy conservation (Q41) | decrease in electricity consumption (Q41) |
| voluntary conservation program (Q24) | decrease in electricity consumption (Q41) |