Duso, Tomaso, Szücs, Florian. 2017. Market power and heterogeneous pass-through in German electricity retail. European Economic Review 98, 354-372.

RIS

@ARTICLE{Duso2017,
title = {Market power and heterogeneous pass-through in German electricity retail},
author = {Tomaso Duso and Florian Szücs},
year = {2017},
doi = {http://dx.doi.org/10.1016/j.euroecorev.2017.07.010},
url = {http://www.sciencedirect.com/science/article/pii/S0014292117301356},
volume = {98},
language = {EN},
pages = {354-372},
journal = {European Economic Review},
abstract = {We analyze the pass-through of cost changes to retail tariffs in the German electricity market over the 2007–2014 period. We find an average pass-through rate of around 60%. This significantly varies with demand factors: while the pass-through rate to baseline tariffs, where firms have greater market power because customers are less willing to switch, is only 50%, it increases to 70% in the competitive segment of the market. Although the pass- through rate of independent firms is significantly higher than that of other firms in the competitive market segment, the extent of supply-side heterogeneity is limited. Thus, the firms’ ability to exercise market power and reduce pass-through appears to be constrained by competition and largely determined by demand side factors. Finally, we find that the pass-through rate in the competitive market segment has been approaching unity over the past years, indicating a rise in competitive pressure.},
}