Duso, Tomaso, Szücs, Florian. 2017. Market power and heterogeneous pass-through in German electricity retail. European Economic Review 98, 354-372.
BibTeX
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.
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Status of publication | Published |
---|---|
Affiliation | WU |
Type of publication | Journal article |
Journal | European Economic Review |
Citation Index | SSCI |
WU Journalrating 2009 | A |
WU-Journal-Rating new | FIN-A, VW-A, WH-B |
Language | English |
Title | Market power and heterogeneous pass-through in German electricity retail |
Volume | 98 |
Year | 2017 |
Page from | 354 |
Page to | 372 |
Reviewed? | Y |
URL | http://www.sciencedirect.com/science/article/pii/S0014292117301356 |
DOI | http://dx.doi.org/10.1016/j.euroecorev.2017.07.010 |
Associations
- People
- Szücs, Florian (Details)
- External
- Duso, Tomaso (DIW, Germany)
- Organization
- Department of Economics DP (Details)
- Department of Economics (Gugler) (Details)