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When Does Regulation Distort Costs? Lessons from Fuel Procurement in U.S. Electricity Generation
Cicala, Steve - 2014
This paper evaluates changes in fuel procurement practices by coal- and gas-fired power plants in the United States following state-level legislation that ended cost-of-service regulation of electricity generation. I find that deregulated plants substantially reduce the price paid for coal (but...
Persistent link: https://www.econbiz.de/10013054040
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Customer Risk from Real-Time Retail Electricity Pricing : Bill Volatility and Hedgability
Borenstein, Severin - 2010
that they would be exposed to risk from fluctuations in their electricity cost. The concern seems to be that a customer … larger than it had budgeted for. I analyze the magnitude of this risk, using demand data from 1142 large industrial customers …, and then ask how much of this risk can be eliminated through various straightforward financial instruments. I find that …
Persistent link: https://www.econbiz.de/10012760642
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Robust Monetary Policy Under Model Uncertainty in a Small Model of the U.S. Economy
Onatski, Alexei; Stock, James H. - 2021
This paper examines monetary policy in Rudebusch and Svensson's (1999) two equation macroeconomic model when the policymaker recognizes that the model is an approximation and is uncertain about the quality of that approximation. It is argued that the minimax approach of robust control provides a...
Persistent link: https://www.econbiz.de/10013310544
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The Allocative Cost of Price Ceilings in the U.S. Residential Market for Natural Gas
Davis, Lucas W. - 2008
A direct consequence of imposing a ceiling on the price of a good for which secondary markets do not exist, is that, when there is excess demand, the good will not be allocated to the buyers who value it the most. The resulting allocative cost has been discussed in the literature as a...
Persistent link: https://www.econbiz.de/10012771807
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What Matters for Electrification? Evidence from 70 Years of U.S. Home Heating Choices
Davis, Lucas - 2022
The percentage of U.S. homes heated with electricity has increased steadily from 1% in 1950, to 8% in 1970, to 26% in 1990, to 39% in 2018. This paper investigates the key determinants of this increase in electrification using data on heating choices from millions of U.S. households over a...
Persistent link: https://www.econbiz.de/10014241849
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Electricity Pricing to U.S. Manufacturing Plants, 1963-2000
Davis, Steven J. - 2010
We develop a large customer-level database to study electricity pricing to U.S. manufacturing plants from 1963 to 2000. We document tremendous dispersion in price per kWh, trace that dispersion to quantity discounts and spatial differentials, estimate the role of cost factors in quantity...
Persistent link: https://www.econbiz.de/10012759550
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Ownership and the Price of Residential Electricity : Evidence from the United States, 1935-1940
Kitchens, Carl - 2016
In this paper, we quantify the difference between public and private prices of residential electricity immediately before and after major federal reforms in the 1930s and 1940s. Previous research found that public prices were lower in a sample of large, urban markets. Based on new data covering...
Persistent link: https://www.econbiz.de/10012992139
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Limits to Arbitrage and Hedging : Evidence from Commodity Markets
Acharya, Viral V. - 2011
producers' hedging demand (speculators' risk-capacity) increase hedging costs via price-pressure on futures, reduce producers …' inventory holdings, and thus spot prices. Consistent with our model, producers' default risk forecasts futures returns, spot … prices, and inventories in oil and gas market data from 1980-2006, and the component of the commodity futures risk premium …
Persistent link: https://www.econbiz.de/10013128612
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Bubble Troubles? Rational Storage, Mean Reversion and Runs in Commodity Prices
Bobenrieth H., Eugenio S. - 2013
High and volatile prices of major commodities have generated a wide array of analyses and policy prescriptions, including influential studies identifying price bubbles in periods of high volatility. Here we consider a model of the market for a storable commodity in which price expectations are...
Persistent link: https://www.econbiz.de/10013082152
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Macro-Hedging for Commodity Exporters
Borensztein, Eduardo - 2010
This paper uses a dynamic optimization model to estimate the welfare gains of hedging against commodity price risk for …
Persistent link: https://www.econbiz.de/10013150436