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A Welfare Measure of a New Type of Energy Assistance Program

Kenneth W. Costello

Year: 1988
Volume: Volume 9
Number: Number 3
DOI: 10.5547/ISSN0195-6574-EJ-Vol9-No3-6
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Abstract:
The sharp increase in utility rates since the 1970s has inflicted great hardship on low-income households. For many, paying their utility bills means sacrificing the purchase of other commodities essential to their economic well-being.' Another symptom of this problem is exhibited by the increased number of low-income people whose utility service has been cut off. Energy assistance programs have been instituted to cope with this serious problem. The major objectives of these programs are: (a) to make energy more affordable to the poor, thereby reducing the number of service disconnections, and (b) to limit how much the poor must pay for energy so that more funds are available for purchasing other essential commodities.



Gas or Electricity, which is Cheaper? An Econometric Approach with Application to Australian Expenditure Data

Robert Bartels, Denzil G. Fiebig and Michael H. Plumb

Year: 1996
Volume: Volume17
Number: Number 4
DOI: 10.5547/ISSN0195-6574-EJ-Vol17-No4-2
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Abstract:
The question of whether it is cheaper for households to use electricity or gas for space heating, water heating and cooking, generates much debate in Australia. Generally, gas appliances are technically less efficient than electrical appliances, but on a per MJ basis, gas is cheaper than electricity. The trade-off between these two factors has typically been assessed using an engineering approach which ignores the fact that gas and electric appliances might be used in different ways in the home and that there may be price effects. This paper utilises an alternative perspective based on econometric methods. We analyse the actual energy expenditures of a large sample of Australian households and estimate the expenditure on the main end-uses for households using different fuel types. We find that households using electricity for main heating spend considerably less than households using gas. For cooking, households using gas generally spend less, while for water heating the results are mixed. We discuss several possible interpretations of these results in terms of consumer preferences and running costs.



Electricity Retailing in Norway

Nils-Henrik M. von der Fehr and Petter Vegard Hansen

Year: 2010
Volume: Volume 31
Number: Number 1
DOI: 10.5547/ISSN0195-6574-EJ-Vol31-No1-2
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Abstract:
We analyze retailer and household behavior on the Norwegian electricity market, based on detailed information on prices and other market characteristics. We find that there exists a competitive market segment where a number of retailers compete fiercely for customers, with small margins on all products. However, we also find indications of monopolistic behavior, whereby retailers exploit the passivity of some of their customers. We discuss potential explanations for these results.



Self-Generation and Households' Willingness to Pay for Reliable Electricity Service in Nigeria

Musiliu O. Oseni

Year: 2017
Volume: Volume 38
Number: Number 4
DOI: 10.5547/01956574.38.4.mose
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Abstract:
Many households in developing countries often engage in self-generation to mitigate the impacts of poor public electricity provision. What is less well known, however, is whether (and how) self-generation influences households' willingness to pay (WTP) for service reliability. Using data collected from a sample of Nigerian households, the results reveal that engagement in self-generation is positively correlated with WTP for reliability. This is despite the fact that self-generation reduces the negative welfare impact of unreliability. Further analyses, however, show that backup households' decisions to pay a higher amount than non-backup households are influenced by the costs of self-generation: an increase of N1 (US$0.006) in self-generation's fuel cost per-hour is associated with WTP about N5.22 (US$0.032) more in the monthly bill. However, households' WTP US$0.15-0.16/kWh of improved reliability is smaller than the marginal costs of reliability from self-generation - US$0.27-0.41/kWh. We conclude by discussing the policy implications of our findings.



Efficient and Equitable Policy Design: Taxing Energy Use or Promoting Energy Savings?

Florian Landis, Sebastian Rausch, Mirjam Kosch, and Christoph Böhringer

Year: 2019
Volume: Volume 40
Number: Number 1
DOI: 10.5547/01956574.40.1.flan
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Abstract:
Should energy use be lowered by using broad-based taxes or through promoting and mandating energy savings through command-and-control measures and targeted subsidies? We integrate a micro-simulation analysis, based on a representative sample of 9,734 households of the Swiss population, into a numerical general equilibrium model to examine the efficiency and equity implications of these alternative regulatory approaches. We find that at the economy-wide level taxing energy is five times more cost-effective than promoting energy savings. About 36% of households gain under tax-based regulation while virtually all households are worse off under a promotion-based policy. Tax-based regulation, however, yields a substantial dispersion in household-level impacts whereas heterogeneous household types are similarly affected under a promotion-based approach. Our analysis points to important trade-offs between efficiency and equity in environmental policy design.





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