| ID | 170347 |
| Title Proper | Too big to change |
| Other Title Information | How heterogeneous firms respond to time-of-use electricity price |
| Language | ENG |
| Author | Zhoua, Yang |
| Summary / Abstract (Note) | To manage the peak load by demand response, time-of-use (TOU) pricing with hourly and seasonal adjustments has been applied in industrial and commercial sectors in Shanghai. However, the requirement of continuous production and exogenous output level might be a serious barrier for responding to TOU price, as these are different across industrial sectors, firm scale or even seasons. Thus, the extent to which heterogeneous firms respond to price signals is still ambiguous and worthy of exploration. Based on a regression discontinuity approach, we disentangle the firm-level effects of TOU pricing for industrial and commercial firms. While the overall result shows a nonsignificant average response to TOU pricing, the firm-level analysis concerning individual heterogeneity indicates that smaller firms are much more sensitive to TOU pricing than larger firms. Moreover, this effect is much more significant in the commercial sector. This study expands understanding of the heterogeneous effects of TOU pricing with consideration of firm-level information and fills the gap between different estimation results from the previous literature. The results also indicate a price policy failure and unbalanced effects on industrial and commercial firms. |
| `In' analytical Note | China Economic Review vol.58 , Dec 2019: p.101342 |
| Journal Source | China Economic Review 2019-12 |
| Key Words | Regression Discontinuity ; Time-of-use Pricing ; Hourly Consumption Data ; Heterogeneous Response |