Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/89038
Authors: 
Bastos, Paulo
Castro, Lucio
Cristia, Julian
Scartascini, Carlos
Year of Publication: 
2011
Series/Report no.: 
IDB Working Paper Series IDB-WP-234
Abstract: 
This paper exploits unique features of a recently introduced tariff schedule for natural gas in Buenos Aires to estimate the short-run impact of price shocks on residential energy utilization. The schedule induces a non-linear and nonmonotonic relationship between householdsÂ’ accumulated consumption and unit prices, thus generating an exogenous source of variation in perceived prices, which is exploited in a regression-discontinuity design. The estimates reveal that a price increase in the utility bill received by consumers causes a substantial and prompt decline in gas consumption. Hence they suggest that policy interventions via the price mechanism, such as price caps and subsidies, are powerful instruments to influence residential energy utilization patterns, even within a short time span.
Subjects: 
Energy consumption
Elasticity of demand
Regulation of public utilities
Regression discontinuity design
Public policy
JEL: 
L95
D12
L51
Q41
Q48
Document Type: 
Working Paper

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