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Transparency of Retail Energy Pricing: Evidence from the US Natural Gas Industry |
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| Authors: | Chi‐Keung Woo Jay Zarnikau Ira Horowitz Alice Shiu |
| Affiliation: | 1. Department of Economics, Baptist University of Hong Kong, , Kowloon Tong, Hong Kong;2. Energy and Environmental Economics, Inc., , San Francisco, CA, USA;3. Frontier Associates LLC, , Austin, TX, USA;4. LBJ School of Public Affairs and Division of Statistics, The University of Texas at Austin, , Austin, TX, USA;5. Warrington College of Business, University of Florida, , Gainesville, FL, USA;6. Public Utilities Research Center, University of Florida, , Gainesville, FL, USA;7. School of Accounting and Finance, Hong Kong Polytechnic University, , Hung Hom, Kowloon, Hong Kong |
| Abstract: | We test and cannot reject the hypothesis that retail pricing of natural gas is transparent for commercial and residential customers served by regulated local distribution companies in the United States. The periods of adjustment to a wholesale price change are 1.54 months for the commercial price and 1.69 months for the residential price. These findings support the view that regulated local distribution companies quickly adjust retail prices to fully capture any change in the wholesale natural gas price. Copyright © 2013 John Wiley & Sons, Ltd. |
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