Journal Title
Title of Journal: J Regul Econ
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Abbravation: Journal of Regulatory Economics
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Authors: Wai Hong Choi Anindya Sen Adam White
Publish Date: 2011/11/18
Volume: 40, Issue: 3, Pages: 303-323
Abstract
This paper uses hourly data from Ontario Canada between 2005 and 2008 to estimate the effects of real time wholesale electricity prices on demand by industrial customers Nonlinear SUR estimates from Generalized Leontief GL specifications reveal elasticities of substitution from 002 to 007 confirming that industrial customers connected to the transmission grid shift consumption across peak and offpeak periods in order to reap benefits of lower prices Estimates from FGLS and IV models suggest that this reduction in demand by industrial customers results in lower wholesale prices which benefits all consumers The policy lesson is that market based schemes that encourage Real Time Pricing RTP pricing should result in positive spillovers to all consumers
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