{"id":9139,"date":"2025-12-15T20:54:32","date_gmt":"2025-12-15T23:54:32","guid":{"rendered":"https:\/\/aaep.org.ar\/?p=9139"},"modified":"2025-12-15T20:54:33","modified_gmt":"2025-12-15T23:54:33","slug":"between-theory-and-the-bill-quasi-experimental-evidence-on-household-response-to-marginal-prices","status":"publish","type":"post","link":"https:\/\/aaep.org.ar\/?p=9139","title":{"rendered":"Between Theory and the Bill: Quasi-Experimental Evidence on Household Response to Marginal Prices"},"content":{"rendered":"<iframe loading=\"lazy\" class=\"wonderplugin-pdf-iframe\" src=\"https:\/\/aaep.org.ar\/wp-content\/plugins\/wonderplugin-pdf-embed\/pdfjslight\/web\/viewer.html?v=2&file=https:\/\/aaep.org.ar\/works\/works2025\/26.pdf\" width=\"100%\" height=\"600px\" style=\"border:0;\"><\/iframe>\n\n\n\n<p><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A central prediction of economic theory is that households adjust consumption to the marginal price they face. Yet in energy markets, growing evidence suggests that consumers often respond instead to average bills, raising doubts about the effectiveness of Increasing Block Pricing (IBP) as a conservation tool. This paper exploits a natural experiment from a subsidy reform that introduced a 350 kWh\/month cap for low-income households: usage below the cap remained subsidized, while usage above it was billed at the full tariff. Using administrative billing data and a difference-in-differences design with household fixed effects and weather controls, we find that historically high-use households reduced December consumption by about 75 kWh. However, when unsubsidized households are added as an additional comparison group in a triple-difference framework, the apparent reductions disappear\u2014suggesting that earlier RD\/DiD evidence, such as Nataraj et al., may conflate marginal-price responses with broader demand dynamics. Overall, households closest to the threshold\u2014the group directly exposed to the marginal price jump\u2014show little adjustment. The results provide new quasi-experimental evidence that electricity consumers respond more to average than to marginal prices, with important implications for the design and evaluation of IBP schemes.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","footnotes":""},"categories":[29],"tags":[33],"class_list":["post-9139","post","type-post","status-publish","format-standard","hentry","category-anales","tag-aaep-anales-2025"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Between Theory and the Bill: Quasi-Experimental Evidence on Household Response to Marginal Prices - Asociaci\u00f3n Argentina de Econom\u00eda Pol\u00edtica<\/title>\n<meta name=\"robots\" content=\"noindex, follow\" \/>\n<meta property=\"og:locale\" content=\"es_ES\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Between Theory and the Bill: Quasi-Experimental Evidence on Household Response to Marginal Prices - Asociaci\u00f3n Argentina de Econom\u00eda Pol\u00edtica\" \/>\n<meta property=\"og:description\" content=\"A central prediction of economic theory is that households adjust consumption to the marginal price they face. Yet in energy markets, growing evidence suggests that consumers often respond instead to average bills, raising doubts about the effectiveness of Increasing Block Pricing (IBP) as a conservation tool. This paper exploits a natural experiment from a subsidy reform that introduced a 350 kWh\/month cap for low-income households: usage below the cap remained subsidized, while usage above it was billed at the full tariff. Using administrative billing data and a difference-in-differences design with household fixed effects and weather controls, we find that historically high-use households reduced December consumption by about 75 kWh. However, when unsubsidized households are added as an additional comparison group in a triple-difference framework, the apparent reductions disappear\u2014suggesting that earlier RD\/DiD evidence, such as Nataraj et al., may conflate marginal-price responses with broader demand dynamics. Overall, households closest to the threshold\u2014the group directly exposed to the marginal price jump\u2014show little adjustment. The results provide new quasi-experimental evidence that electricity consumers respond more to average than to marginal prices, with important implications for the design and evaluation of IBP schemes.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/aaep.org.ar\/?p=9139\" \/>\n<meta property=\"og:site_name\" content=\"Asociaci\u00f3n Argentina de Econom\u00eda Pol\u00edtica\" \/>\n<meta property=\"article:published_time\" content=\"2025-12-15T23:54:32+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-12-15T23:54:33+00:00\" \/>\n<meta name=\"author\" content=\"aaepolitica\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@aaepoficial\" \/>\n<meta name=\"twitter:site\" content=\"@aaepoficial\" \/>\n<meta name=\"twitter:label1\" content=\"Escrito por\" \/>\n\t<meta name=\"twitter:data1\" content=\"aaepolitica\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/aaep.org.ar\\\/?p=9139#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/aaep.org.ar\\\/?p=9139\"},\"author\":{\"name\":\"aaepolitica\",\"@id\":\"https:\\\/\\\/aaep.org.ar\\\/#\\\/schema\\\/person\\\/7150b747ba20875259c74b2cd177316c\"},\"headline\":\"Between Theory and the Bill: Quasi-Experimental Evidence on Household Response to Marginal Prices\",\"datePublished\":\"2025-12-15T23:54:32+00:00\",\"dateModified\":\"2025-12-15T23:54:33+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/aaep.org.ar\\\/?p=9139\"},\"wordCount\":28,\"publisher\":{\"@id\":\"https:\\\/\\\/aaep.org.ar\\\/#organization\"},\"keywords\":[\"AAEP Anales 2025\"],\"articleSection\":[\"Anales\"],\"inLanguage\":\"es\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/aaep.org.ar\\\/?p=9139\",\"url\":\"https:\\\/\\\/aaep.org.ar\\\/?p=9139\",\"name\":\"Between Theory and the Bill: Quasi-Experimental Evidence on Household Response to Marginal Prices - 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