PHILADELPHIA, Nov 3, 2008 -- UPI

A study shows the average U.S. household rapidly reduces its electricity use when prices rise and fall quickly.

The study, included in the Rand Journal of Economics, was led by Matthew White of the University of Pennsylvania and Peter Reiss, and focused on how thousands of home owners in California changed their energy use before and after the state's electricity crisis. The study used metered energy consumption data for 70,000 households instead of self reports.

The researchers found when electricity prices doubled, the average household reduced its electricity use by about 13 percent within 60 days. More than one third of all households reduced their monthly electricity use by more than 20 percent.

But when electricity prices later decreased, energy use rebounded to nearly previous levels within about a month.

"We may not like paying higher prices for electricity when there isn't enough to go around, but it turns out people find ways to conserve a lot of it, and quickly, in order to lower their bill," the researchers wrote. "It is clear that the typical household is willing and able to reduce its energy consumption by meaningful amounts when prices change, and given useful, specific information on how to do so."

The study is reported in the Rand Journal of Economics.

News Provided By