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Energies 2016, 9(12), 1093; doi:10.3390/en9121093

An Experimental Study of the Impact of Dynamic Electricity Pricing on Consumer Behavior: An Analysis for a Remote Island in Japan

1
Graduate School of Economics, Ritsumeikan University, 1-1-1 Nojihigashi, Kusatsu, Shiga 525-8577, Japan
2
Faculty of Economics, Ritsumeikan University, 1-1-1 Nojihigashi, Kusatsu, Shiga 525-8577, Japan
3
E-konzal, 207, 3-8-15, Nishinakajima, Yodogawa, Osaka 532-0001, Japan
4
Information Science and Technology Center, Kobe University, 1-1 Rokkodai-cho, Nada-ku, Kobe 657-8501, Japan
5
Hyogo Prefectural Institute of Technology, 3-1-12 Yuihira-cho, Suma-ku, Kobe 654-0037, Japan
6
Kei Communication Technology Inc., Shinko Building 8F, 8 Kaigandori, Chuo-ku, Kobe 650-0024, Japan
*
Author to whom correspondence should be addressed.
Academic Editor: Giovanni Pau
Received: 31 October 2016 / Revised: 10 December 2016 / Accepted: 12 December 2016 / Published: 20 December 2016
(This article belongs to the Special Issue Smart Home Energy Management)
View Full-Text   |   Download PDF [2672 KB, uploaded 20 December 2016]   |  

Abstract

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. View Full-Text
Keywords: dynamic pricing; electric energy demand response; habit formation dynamic pricing; electric energy demand response; habit formation
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MDPI and ACS Style

Nguyen, T.T.K.; 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. Energies 2016, 9, 1093.

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