Lifeline-policy recommendations for public-utility pricing: Theory and practice

Thesis/Dissertation · Fri Jan 01 04:00:00 EST 1988

OSTI ID:5225882

Yeom, M

This dissertation sets up a welfare criterion to investigate whether a lifeline policy improves social welfare, and if it does, to find the optimal lifeline tariff, when the government authorities endeavor to tackle dual social problems (allocational efficiency and distributional equity). The lifeline policy is characterized by a discriminatory second-best pricing policy for distributional improvement. Under the lifeline structure every consumer confronts a kinked budget constraint, and a conventional demand curve cannot be derived. Instead of a smooth and continuous downward-slopping relationship between price and quantity, only one point corresponds to a specific schedule of lifeline tariff. One cannot depend on traditional differential calculus to attain the optimum state, because price is neither unique (single-valued) nor uniform (flat-rated). A Hicksian welfare measure is employed for direct comparison between two different states as a procedure to reach the optimum state. The validity of the theoretical framework is tested through empirical application to one advanced country (the USA) and one developing country (Korea).

• Research Organization: Johns Hopkins Univ., Baltimore, MD (USA)
• OSTI ID: 5225882
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
290200* -- Energy Planning & Policy-- Economics & Sociology
ASIA
CONSTRAINTS
DEMAND FACTORS
DEVELOPING COUNTRIES
GOVERNMENT POLICIES
NORTH AMERICA
OPTIMIZATION
PUBLIC UTILITIES
RATE STRUCTURE
RECOMMENDATIONS
REPUBLIC OF KOREA
TARIFFS
USA