The Redistributional Impact of Nonlinear Electricity Pricing

A-Tier
Journal: American Economic Journal: Economic Policy
Year: 2012
Volume: 4
Issue: 3
Pages: 56-90

Score contribution per author:

4.022 = (α=2.01 / 1 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Electricity regulators often mandate increasing-block pricing (IBP)—i.e., marginal price increases with the customer's average daily usage—to protect low-income households from rising costs. IBP has no cost basis, raising a classic conflict between efficiency and distributional goals. Combining household-level utility billing data with census data on income, I find that IBP in California results in modest wealth redistribution, but creates substantial deadweight loss relative to the transfers. I also show that a common approach to studying income distribution effects by using median household income within census block groups may be misleading. (JEL D31, L11, L51, L94, L98, Q41, Q48)

Technical Details

RePEc Handle
repec:aea:aejpol:v:4:y:2012:i:3:p:56-90
Journal Field
General
Author Count
1
Added to Database
2026-01-24