Do Americans consume too little natural gas?
Subtitle: an empirical test of marginal cost pricing
By: Lucas W. Davis, Erich Muehlegger
Contributors: Muehlegger, Erich; National Bureau of Economic Research
Series: NBER working paper series -- working paper 15885; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 15885.
Publisher: National Bureau of Economic Research
Published: 2010
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "This paper measures the extent to which prices exceed marginal costs in the U.S.  natural gas distribution market during the period 1991-2007.  We find large departures from marginal cost pricing in all 50 states, with residential and commercial customers facing average markups of over 40%.  Based on conservative estimates of the price elasticity of demand these distortions impose hundreds of millions of dollars of annual welfare loss.  Moreover, current price schedules are an important pre-existing distortion which should be taken into account when evaluating carbon taxes and other policies aimed at addressing external costs"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 4/13/2010.

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