Shock Value: Bill Smoothing and Energy Price Pass‐Through
dc.contributor.author | Hausman, Catherine | |
dc.date.accessioned | 2020-01-13T15:09:20Z | |
dc.date.available | WITHHELD_6_MONTHS | |
dc.date.available | 2020-01-13T15:09:20Z | |
dc.date.issued | 2019-06 | |
dc.identifier.citation | Hausman, Catherine (2019). "Shock Value: Bill Smoothing and Energy Price Pass‐Through." The Journal of Industrial Economics (2): 242-278. | |
dc.identifier.issn | 0022-1821 | |
dc.identifier.issn | 1467-6451 | |
dc.identifier.uri | https://hdl.handle.net/2027.42/152760 | |
dc.publisher | Wiley Periodicals, Inc. | |
dc.publisher | The Wharton School, University of Pennsylvania | |
dc.title | Shock Value: Bill Smoothing and Energy Price Pass‐Through | |
dc.type | Article | |
dc.rights.robots | IndexNoFollow | |
dc.subject.hlbsecondlevel | Economics | |
dc.subject.hlbtoplevel | Business and Economics | |
dc.description.peerreviewed | Peer Reviewed | |
dc.description.bitstreamurl | https://deepblue.lib.umich.edu/bitstream/2027.42/152760/1/joie12200.pdf | |
dc.description.bitstreamurl | https://deepblue.lib.umich.edu/bitstream/2027.42/152760/2/joie12200_am.pdf | |
dc.description.bitstreamurl | https://deepblue.lib.umich.edu/bitstream/2027.42/152760/3/joie12200-sup-0001-Appendix.pdf | |
dc.identifier.doi | 10.1111/joie.12200 | |
dc.identifier.source | The Journal of Industrial Economics | |
dc.identifier.citedreference | Marmer, V., Shapiro, D. and MacAvoy, P., 2007, ‘ Bottlenecks in Regional Markets for Natural Gas Transmission Services,’ Energy Economics, 29, pp. 37 – 45. | |
dc.identifier.citedreference | McRae, S. and Meeks, R., 2016, ‘ Price Perception and Electricity Demand with Nonlinear Tariffs,’ manuscript ( University of Michigan, Ann Arbor, Michigan, U.S.A. ). | |
dc.identifier.citedreference | Memphis Light, Gas and Water, 2016, ‘ 2016 Utility Bill Comparisons for Selected U.S. Cities,’ http://www.mlgw.com/images/content/files/pdf/2016RatesSurvey2016.pdf. | |
dc.identifier.citedreference | Muehlegger, E. and Sweeney, R. L., 2017, ‘ Pass‐Through of Input Cost Shocks under Imperfect Competition: Evidence from the U.S. Fracking Boom,’ NBER working paper 24025 ( National Bureau of Economic Research, Cambridge, Massachusetts, U.S.A. ). | |
dc.identifier.citedreference | Myers, E., 2018, ‘ Asymmetric Information in Residential Rental Markets: Implications for the Energy Efficiency Gap,’ E2e working paper 021 ( Haas School of Business, University of California at Berkeley, California, U.S.A. ). | |
dc.identifier.citedreference | Nakamura, E. and Steinsson, J., 2008, ‘ Five Facts about Prices: A Reevaluation of Menu Cost Models,’ The Quarterly Journal of Economics, 123 (4), pp. 1415 – 1464. | |
dc.identifier.citedreference | Primeaux, Jr., W. J. and Mann, P. C., 1986, ‘ Regulator Selection Methods and Electricity Prices,’ Land Economics, 62 (1), pp. 1 – 13. | |
dc.identifier.citedreference | Puller, S. L. and West, J., 2013, ‘ Efficient Retail Pricing in Electricity and Natural Gas Markets,’ American Economic Review, 103 (3), pp. 350 – 355. | |
dc.identifier.citedreference | Rotemberg, J. J., 2005, ‘ Customer Anger at Price Increases, Changes in the Frequency of Price Adjustment and Monetary Policy,’ Journal of Monetary Economics, 52, pp. 829 – 852. | |
dc.identifier.citedreference | Rotemberg, J. J., 2011, ‘ Fair Pricing,’ Journal of the European Economic Association, 9 (5), pp. 952 – 981. | |
dc.identifier.citedreference | Sexton, S., 2015, ‘ Automatic Bill Payment and Salience Effects: Evidence from Electricity Consumption,’ The Review of Economics and Statistics, 97 (2), pp. 229 – 241. | |
dc.identifier.citedreference | Sibly, H., 2002, ‘ Loss Averse Customers and Price Inflexibility,’ Journal of Economic Psychology, 23, pp. 521 – 538. | |
dc.identifier.citedreference | Stolper, S., 2016, ‘ Who Bears the Burden of Energy Taxes? The Role of Local Pass‐Through,’ Harvard Environmental Economics Program discussion paper 16‐70 ( Harvard University, Cambridge, Massachusetts, U.S.A. ). | |
dc.identifier.citedreference | Tappata, M., 2009, ‘ Rockets and Feathers: Understanding Asymmetric Pricing,’ RAND Journal of Economics, 40 (4), pp. 673 – 687. | |
dc.identifier.citedreference | Viscusi, W. K., Vernon, J. M. and Harrington, J. E., 2005, Economics of Regulation and Antitrust, 4 edn ( The MIT Press, Cambridge, Massachusetts, U.S.A. ). | |
dc.identifier.citedreference | Zajac, E. E., 1985, ‘ Perceived Economic Justice: The Example of Public Utility Regulation,’ in H. P. Young (ed.), Cost Allocation: Methods, Principles, Applications, North‐Holland. | |
dc.identifier.citedreference | Abito, J. M., 2016, ‘ Agency Costs in Environmental Regulation: Evidence from Regulated Electric Utilities,’ working paper ( The Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania, U.S.A. ). | |
dc.identifier.citedreference | American Gas Association, 2015, ‘ Natural Gas Utility Rate Structure: The Customer Charge Component – 2015 Update,’ https://www.aga.org/sites/default/files/ea_2015-03_customercharge2015.pdf. | |
dc.identifier.citedreference | American Gas Association, 2016, ‘ LDC Supply Portfolio Management During the 2014‐15 Winter Heating Season,’ https://www.aga.org/sites/default/files/sites/default/files/media/ea_2016-03_2014-15_winter_heating_season_ea.pdf. | |
dc.identifier.citedreference | Anderson, E. T. and Simester, D. I., 2010, ‘ Price Stickiness and Customer Antagonism,’ The Quarterly Journal of Economics, 125 (2), pp. 729 – 765. | |
dc.identifier.citedreference | Auffhammer, M. and Rubin, E., 2018, ‘ Natural Gas Price Elasticities and Optimal Cost Recovery Under Consumer Heterogeneity: Evidence from 300 Million Natural Gas Bills,’ NBER working paper 24295 ( National Bureau of Economics Research, Cambridge, Massachusetts, U.S.A. ). | |
dc.identifier.citedreference | Beard, T. R., Gropper, D. M. and Raymond, J. E., 1998, ‘ Bill Averaging Programs and Consumer Behavior: Theory and Evidence,’ Journal of Regulatory Economics, 13, pp. 19 – 35. | |
dc.identifier.citedreference | Beecher, J. A. and Kihm, S. G., 2016, Risk Principles for Public Utility Regulators ( Michigan State University Press, East Lansing, Michigan, U.S.A. ). | |
dc.identifier.citedreference | Besley, T. and Coate, S., 2003, ‘ Elected Versus Appointed Regulators: Theory and Evidence,’ Journal of the European Economic Association, 1 (5), pp. 1176 – 1206. | |
dc.identifier.citedreference | Bils, M. and Klenow, P. J., 2004, ‘ Some Evidence on the Importance of Sticky Prices,’ Journal of Political Economy, 112 (5), pp. 947 – 985. | |
dc.identifier.citedreference | Boivin, J., Giannoni, M. P. and Mihov, I., 2009, ‘ Sticky Prices and Monetary Policy: Evidence from Disaggregated U.S. Data,’ American Economic Review, 99 (1), pp. 350 – 384. | |
dc.identifier.citedreference | Bonbright, J. C., Danielsen, A. L. and Kamerschen, D. R., 1988, Principles of Public Utility Rates, 2 edn ( Public Utilities Reports, Inc., Reston, Virginia, U.S.A. ). | |
dc.identifier.citedreference | Borenstein, S., 2005, ‘ The Long‐Run Efficiency of Real‐Time Electricity Pricing,’ The Energy Journal, 26 ( 3 ), pp. 93 – 110. | |
dc.identifier.citedreference | Borenstein, S., 2013, ‘ Effective and Equitable Adoption of Opt‐In Residential Dynamic Electricity Pricing,’ Review of Industrial Organization, 42, pp. 127 – 160. | |
dc.identifier.citedreference | Borenstein, S., Cameron, A. C. and Gilbert, R., 1997, ‘ Do Gasoline Prices Respond Asymmetrically to Crude Oil Price Changes? ’ Quarterly Journal of Economics, 112 (1), pp. 305 – 339. | |
dc.identifier.citedreference | Borenstein, S. and Davis, L. W., 2012, ‘ The Equity and Efficiency of Two‐Part Tariffs in U.S. Natural Gas Markets,’ Journal of Law and Economics, 5 ( 1 ), pp. 75 – 128. | |
dc.identifier.citedreference | Borenstein, S. and Kellogg, R., 2014, ‘ The Incidence of an Oil Glut: Who Benefits from Cheap Crude Oil in the Midwest? ’ The Energy Journal, 35 (1), pp. 15 – 33. | |
dc.identifier.citedreference | Borenstein, S., Busse, M. R. and Kellogg, R., 2012, ‘ Career Concerns, Inaction and Market Inefficiency: Evidence from Utility Regulation,’ Journal of Industrial Economics, 60 ( 2 ), pp. 220 – 248. | |
dc.identifier.citedreference | Chu, Y., Holladay, S. and LaRiviere, J., 2017, ‘ Opportunity Cost Pass‐Through from Fossil Fuel Market Prices to Procurement Costs of the U.S. Power Producers,’ Journal of Industrial Economics, 65 (4), pp. 842 – 871. | |
dc.identifier.citedreference | Costello, K., 2016, ‘ Vertical Arrangements for Natural Gas Procurement by Utilities: Rationales and Regulatory Considerations.’ National Regulatory Research Institute report no. 16‐04 ( NRRI, 1101 Vermont Avenue, Washington, D.C., U.S.A. ). | |
dc.identifier.citedreference | Davis, L. W. and Muehlegger, E., 2010, ‘ Do Americans Consume Too Little Natural Gas? An Empirical Test of Marginal Cost Pricing,’ RAND Journal of Economics, 41 (4), pp. 791 – 810. | |
dc.identifier.citedreference | Davis, M. C. and Hamilton, J. D., 2004, ‘ Why Are Prices Sticky? The Dynamics of Wholesale Gasoline Prices,’ Journal of Money, Credit and Banking, 36 (1), pp. 17 – 37. | |
dc.identifier.citedreference | Edison Electric Institute, 2016, ‘ Memo: Primer on Rate Design for Residential Distributed Generation,’ http://www.puc.state.pa.us/pcdocs/1423623.pdf. Memo to NARUC President. | |
dc.identifier.citedreference | Energy Information Administration, 2007, ‘ Impact of Higher Natural Gas Prices on Local Distribution Companies and Residential Customers,’ https://www.eia.gov/pub/oil_gas/natural_gas/feature_articles/2007/ngpristudy/ngpristudy.pdf. | |
dc.identifier.citedreference | Energy Information Administration, 2011, ‘ Natural Gas Annual,’ https://www.eia.gov/naturalgas/annual/archive/2011/pdf/nga11.pdf. | |
dc.identifier.citedreference | Energy Information Administration, 2017, ‘ Natural Gas Annual,’ https://www.eia.gov/naturalgas/annual/pdf/nga17.pdf. | |
dc.identifier.citedreference | Fabra, N. and Reguant, M., 2014, ‘ Pass‐Through of Emissions Costs in Electricity Markets,’ American Economic Review, 104 (9), pp. 2872 – 2899. | |
dc.identifier.citedreference | Ganapati, S.; Shapiro, J. S. and Walker, R., 2016, ‘ The Incidence of Carbon Taxes in U.S. Manufacturing: Lessons from Energy Cost Pass‐Through,’ NBER working paper 22281 ( National Bureau of Economic Research, Cambridge, Massachusetts, U.S.A. ). | |
dc.identifier.citedreference | Gorodnichenko, Y. and Weber, M., 2016, ‘ Are Sticky Prices Costly? Evidence from the Stock Market,’ American Economic Review, 106 (1), pp. 165 – 199. | |
dc.identifier.citedreference | Graves, F. C. and Levine, S. H., 2010, ‘ Managing Natural Gas Price Volatility: Principles and Practices across the Industry,’ https://bipartisanpolicy.org/wp-content/uploads/sites/default/files/Managing%20Natural%20Gas%20Price%20Volatility.pdf ( The Brattle Group, prepared for American Clean Skies Foundation, 1800 m street NW, Washington, D.C., U.S.A. ). | |
dc.identifier.citedreference | Graves, F.; Hanser, P. Q. and Basheda, G., 2007, ‘ Rate Shock Mitigation,’ http://www.eei.org/issuesandpolicy/stateregulation/Documents/rate_shock_mitigation.pdf ( The Brattle Group, prepared for Edison Electric Institute, 1800 M Street NW, Washington, D.C., U.S.A. ). | |
dc.identifier.citedreference | Grubb, M. D., 2012, ‘ Dynamic Nonlinear Pricing: Biased Expectations, Inattention, and Bill Shock,’ International Journal of Industrial Organization, 30, pp. 287 – 290. | |
dc.identifier.citedreference | Grubb, M. D., 2015, ‘ Consumer Inattention and Bill‐Shock Regulation,’ Review of Economic Studies, 82 (1), pp. 219 – 257. | |
dc.identifier.citedreference | Grubb, M. D. and Osborne, M., 2015, ‘ Cellular Service Demand: Biased Beliefs, Learning, and Bill Shock,’ American Economic Review, 105 (1), pp. 234 – 271. | |
dc.identifier.citedreference | Guthrie, G., 2006, ‘ Regulating Infrastructure: The Impact on Risk and Investment,’ Journal of Economic Literature, 44, pp. 925 – 972. | |
dc.identifier.citedreference | Hagerman, R. L. and Ratchford, B. T., 1978, ‘ Some Determinants of Allowed Rates of Return on Equity to Electric Utilities,’ The Bell Journal of Economics, 9 (1), pp. 46 – 55. | |
dc.identifier.citedreference | Hausman, C. and Muehlenbachs, L., 2019, ‘ Price Regulation and Environmental Externalities: Evidence from Methane Leaks,’ Journal of the Association of Environmental and Resource Economists, 6 (1), pp. 73 – 109. | |
dc.identifier.citedreference | Hausman, C. and Kellogg, R., 2015, ‘ Welfare and Distributional Implications of Shale Gas,’ Brookings Papers on Economic Activity, spring, pp. 71 – 125. | |
dc.identifier.citedreference | Hortacsu, A.; Madanizadeh, S. A. and Puller, S. L., 2017, ‘ Power to Choose? An Analysis of Consumer Inertia in the Residential Electricity Market,’ American Economic Journal: Economic Policy, 9, pp. 192 – 226. | |
dc.identifier.citedreference | Imelda; Fripp, M. and Roberts, M. J., 2018, ‘ Variable Pricing and the Social Cost of Renewable Energy,’ NBER Working Paper 24712 (National Bureau of Economic Research, Cambridge, Massachusetts, U.S.A.). | |
dc.identifier.citedreference | Ito, K., 2014, ‘ Do Consumers Respond to Marginal or Average Price? Evidence from Nonlinear Electricity Pricing,’ American Economic Review, 104, pp. 537 – 563. | |
dc.identifier.citedreference | Johnson, R. N., 2002, ‘ Search Costs, Lags and Prices at the Pump,’ Review of Industrial Organization, 20, pp. 33 – 50. | |
dc.identifier.citedreference | Joskow, P. L., 1974, ‘ Inflation and Environmental Concern: Structural Change in the Process of Public Utility Price Regulation,’ Journal of Law and Economics, 17, pp. 291 – 327. | |
dc.identifier.citedreference | Joskow, P. L., Rose, N. L. and Wolfram, C. D., 1996, ‘ Political Constraints on Executive Compensation: Evidence from the Electric Utility Industry,’ The RAND Journal of Economics, 27 (1), pp. 165 – 182. | |
dc.identifier.citedreference | Kahneman, D., Knetsch, J. L. and Thaler, R., 1986, ‘ Fairness as a Constraint on Profit Seeking: Entitlements in the Market,’ American Economic Review, 76 (4), pp. 728 – 741. | |
dc.identifier.citedreference | Kehoe, P. and Midrigan, V., 2015, ‘ Prices are Sticky after All,’ Journal of Monetary Economics, 75, pp. 35 – 53. | |
dc.identifier.citedreference | Knittel, C. R., 2003, ‘ Market Structure and the Pricing of Electricity and Natural Gas,’ Journal of Industrial Economics, 51 (2), pp. 167 – 191. | |
dc.identifier.citedreference | Knittel, C. R., Meiselman, B. S. and Stock, J. H., 2017, ‘ The Pass‐Through of RIN Prices to Wholesale and Retail Fuels under the Renewable Fuel Standard,’ Journal of the Association of Environmental and Resource Economists, 4 (4), pp. 1081 – 1119. | |
dc.identifier.citedreference | Kolbe, A. L., Hanswer, P. Q. and Zhou, B., 2013, ‘ Reducing Rate Shocks,’ http://www.brattle.com/system/publications/pdfs/000/003/978/original/Reducing_Rate_Shocks_Kolbe_Hanser_Zhou_PUF_June_2013.pdf. From Public Utilities Fortnightly. | |
dc.identifier.citedreference | Lade, G. E. and Bushnell, J. B., 2019, ‘ Fuel Subsidy Pass‐Through and Market Structure: Evidence from the Renewable Fuel Standard,’ Journal of the Association of Environmental and Resource Economists, 6 ( 3 ), pp. 563 – 592. | |
dc.identifier.citedreference | Leaver, C., 2009, ‘ Bureaucratic Minimal Squawk Behavior: Theory and Evidence from Regulatory Agencies,’ American Economic Review, 99 (3), pp. 572 – 607. | |
dc.identifier.citedreference | Levinson, A. and Silva, E., 2019, ‘ The Electric Gini: Income Redistribution through Energy Prices,’ mimeo ( Georgetown University, Washington, D.C., U.S.A. ). | |
dc.identifier.citedreference | Lewis, M. S., 2011, ‘ Asymmetric Price Adjustment and Consumer Search: An Examination of the Retail Gasoline Market,’ Journal of Economics & Management Strategy, 20 (2), pp. 409 – 449. | |
dc.identifier.citedreference | Lim, C. S. H. and Yurukoglu, A., 2018, ‘ Dynamic Natural Monopoly Regulation: Time Inconsistency, Moral Hazard, and Political Environments,’ Journal of Political Economy, 126 (1), pp. 263 – 312. | |
dc.identifier.citedreference | Marion, J. and Muehlegger, E., 2011, ‘ Fuel Tax Incidence and Supply Conditions,’ Journal of Public Economics, 95, pp. 1202 – 1212. | |
dc.owningcollname | Interdisciplinary and Peer-Reviewed |
Files in this item
Remediation of Harmful Language
The University of Michigan Library aims to describe library materials in a way that respects the people and communities who create, use, and are represented in our collections. Report harmful or offensive language in catalog records, finding aids, or elsewhere in our collections anonymously through our metadata feedback form. More information at Remediation of Harmful Language.
Accessibility
If you are unable to use this file in its current format, please select the Contact Us link and we can modify it to make it more accessible to you.