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Title:The extent of European power markets PDF Logo
Authors:Böckers, Veit
Heimeshoff, Ulrich
Issue Date:2012
Series/Report no.:DICE Discussion Paper 50
Abstract:This paper analyzes the convergence process of Central-West European wholesale electricity markets from 2004 to the beginning of 2011. Jevon's law of price indifference is scrutinized using price correlation, parametric and nonparametric tests of price-differences and cointegration analysis. As a unique identifaction strategy national bank holidays are used as exogenous system shocks to trace the degree of market integration before the advent of the so-called market coupling of European power markets. In order to avoid overestimation of the degree of market integration, we specifically control for seasonal effects and common input factors. While the overall degree of integration between Germany and its neighbours has increased in the course of time, results suggest that only Austria and Germany already constitute a joint price area and that market coupling increases the convergence of markets at least between its participants.
Subjects:Market Structure
Spatial Market Delineation
Time Series Econometrics
Energy Data, Electricity
Europe
JEL:C32
L1
L40
L94
Q40
ISBN:978-3-86304-049-9
Document Type:Working Paper
Appears in Collections:DICE Discussion Paper, Düsseldorf Institute for Competition Economics (DICE)

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