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LAPSE:2019.0401
Published Article
LAPSE:2019.0401
An Experimental Study of the Impact of Dynamic Electricity Pricing on Consumer Behavior: An Analysis for a Remote Island in Japan
Thoa Thi Kim Nguyen, Koji Shimada, Yuki Ochi, Takuya Matsumoto, Hiroshi Matsugi, Takao Awata
February 27, 2019
The aim of this research was to investigate how consumer behavior changes after application of dynamic electricity pricing and the persistence of those changes. Based on the investigation results, the authors also discuss the policy implications of demand management to shift consumption to days that have more solar radiation, while at the same time reducing overall consumption. The dynamic pricing experiment was implemented on Nushima Island, located in the center of Japan, with the participation of 50 households. The methodologies used in this study are panel analysis with random effects, and the difference in differences method. Several linear regression analyses are performed to predict hourly electricity usage from a number of explanatory variables, such as life-style factors, the frequency of access to the visualization website, control for weather factors (wind speed and temperatures), and other attributes of the households to predict the log of hourly electric energy consumption. The results show that dynamic pricing brought about 13.8% reduction of electric energy consumption in comparison with the pre-experiment period. Also, by applying a new experimental design approach, this study finds data supportive of habit formation by participants. Based on the findings, this research tries to develop a policy for sustainable energy conservation in remote islands.
Keywords
dynamic pricing, electric energy demand response, habit formation
Suggested Citation
Nguyen TTK, Shimada K, Ochi Y, Matsumoto T, Matsugi H, Awata T. An Experimental Study of the Impact of Dynamic Electricity Pricing on Consumer Behavior: An Analysis for a Remote Island in Japan. (2019). LAPSE:2019.0401
Author Affiliations
Nguyen TTK: Graduate School of Economics, Ritsumeikan University, 1-1-1 Nojihigashi, Kusatsu, Shiga 525-8577, Japan
Shimada K: Faculty of Economics, Ritsumeikan University, 1-1-1 Nojihigashi, Kusatsu, Shiga 525-8577, Japan [ORCID]
Ochi Y: E-konzal, 207, 3-8-15, Nishinakajima, Yodogawa, Osaka 532-0001, Japan
Matsumoto T: Information Science and Technology Center, Kobe University, 1-1 Rokkodai-cho, Nada-ku, Kobe 657-8501, Japan
Matsugi H: Hyogo Prefectural Institute of Technology, 3-1-12 Yuihira-cho, Suma-ku, Kobe 654-0037, Japan
Awata T: Kei Communication Technology Inc., Shinko Building 8F, 8 Kaigandori, Chuo-ku, Kobe 650-0024, Japan
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Journal Name
Energies
Volume
9
Issue
12
Article Number
E1093
Year
2016
Publication Date
2016-12-20
Published Version
ISSN
1996-1073
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Original Submission
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PII: en9121093, Publication Type: Journal Article
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LAPSE:2019.0401
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doi:10.3390/en9121093
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Feb 27, 2019
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CC BY 4.0
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Feb 27, 2019
 
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Original Submitter
Calvin Tsay
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