Corporate responses to public pressures and price increases:Evidence from Japan's electricity crisis
Year: 2019
Type: preprint
Abstract: Behaviors of non-residential electricity customers during power crises have been underinvestigated.This study adds to the literature by providing some empirical evidence from the analysis of Japan's electricity crisis after the 2011 earthquake using firm-level micro data.The earthquake created a natural experiment to examine the effect of public pressures and price increases on firms' electricity consumptions during a power crisis.Using a DID model, we show that firms' electricity consumption as a whole was elastic to public pressures in a short term but inelastic to price.On closer look, however, the power conservation during public pressures was made by only 30% of the firms.The remaining 70% of the firms were free-riders, but their electricity consumption was actually elastic to price.The result indicates that it is important for policy makers to implement both economic and non-economic incentive interventions to promptly induce conservation from as many firms as possible during power crises as firms tend to respond to either economic or non-economic incentives.
Language: English
Field: Energy
Domain: Physical Sciences
Open Access status: green
OpenAlex ID: W2979069724