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Title: Loss Aversion and Time-Differentiated Electricity Pricing

I develop a model of loss aversion over electricity expenditure, from which I derive testable predictions for household electricity consumption while on combination time-of-use (TOU) and critical peak pricing (CPP) plans. Testing these predictions results in evidence consistent with loss aversion: (1) spillover effects - positive expenditure shocks resulted in significantly more peak consumption reduction for several weeks thereafter; and (2) clustering - disproportionate probability of consuming such that expenditure would be equal between the TOUCPP or standard flat-rate pricing structures. This behavior is inconsistent with a purely neoclassical utility model, and has important implications for application of time-differentiated electricity pricing.
Authors:
 [1]
  1. Lawrence Berkeley National Lab. (LBNL), Berkeley, CA (United States)
Publication Date:
OSTI Identifier:
1248927
Report Number(s):
LBNL--182764
ir:182764
DOE Contract Number:
AC02-05CH11231
Resource Type:
Technical Report
Research Org:
Lawrence Berkeley National Laboratory (LBNL), Berkeley, CA (United States)
Sponsoring Org:
USDOE
Country of Publication:
United States
Language:
English
Subject:
29 ENERGY PLANNING, POLICY, AND ECONOMY