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We estimate consumer response to the first large-scale real-time electricity pricing (RTP) program. In 2015, RTP became the default tariff for residential customers in Spain, exposing them to prices that vary hourly based on day-ahead wholesale prices. Using expected national wind production as an instrument for price, we estimate household-level demand elasticities for RTP households and non-RTP (placebo) households. Estimates show no difference in behavior across RTP and non-RTP households. Reasons for nonresponse may include low potential gains or high nonmonetary costs of information acquisition and behavioral change. We discuss implications for optimal dynamic electricity pricing.
demand and supply; prices; electric utilities; goverment policy; household; consumer economics