Mechanism Design,Effect Assessment And Policy Implication Of Residential Block Tariff

As a kind of Non-linear Pricing,Block(or Tiered)Pricing is very common in the pricing of commodity goods.Relative to Uniform Liner Pricing,the prices of Block Pricing is varying with the changing of consumption.If the prices are increasing(or decreasing)with the inceasing of consumption,we will define this price mechanism as Increasing(or Decreasing)Block Pricing(IBP or DBP).Generally speaking,if commom goods want to promote sales volume by price discounts,it will take the form of DBP.However,in the scarcity of resources or enegy fields,IBP is the major form of pricing.IBP has already become widespread in 1960s of American residential water,electricity and other fields,and then quickly spreaded to other countries.According to incomplete statistics,sixteen countries have taken the IBP form in electricity market pricing.China brought in this price mechanism formally in 2012.The purpose of changing Uniform Pricing with IBP is not only to solve the cross-subsidy phenomenon which is long existed in electric system,but also to achieve the enegy-saving emission reduction with lever of price.The reason for the population of IBP is that this price mechanism could achieve both economic and social goals.In the economic objectives,IBP could ensure the recovery of manufacture's cost and profit,and prompt the manufacture to improve its efficiency.In addition,IBP could report market information,align market demand and be a market signal.In the social objectives,the price and consumption on low block of IBP could guarantee the basic need of residential(especially low-income family),which is meaning fair goal.The trait that price becomes higher with consumption could stimulate enegy-saving and play a role of secondary income redistribution.IBP could banlance the economic and social obgectives,though,in the theory.Lots of foreign literatures have already prove it could resolve the problems better than Uniform Linear Pricing(ULP).But there are many differences in sociaty,culture and geographic location between domestic and abroad,plus existing electricity system and social situation,we should consider that whether foreign practical experiences apply to domestic circumstances,what the implementation effect and degree of IBP in China,and if IBP could resolve the problems efficiently?In consequence,this article mainly targets the implementation situation and effects of IBP in residential electricity field,analyze the influences on residences and the degree of implementation effects emphatically.Firstly,this article introducts the conotations of Block Pricing,such as consept,traits,forms,and related literature review,which give reader a comprehensive insights into it.The third chapter targets Block Pricing in residential electricity field,analyze the implementation background,situation and influencing factor,which make reander has a clear understanding to it.Then,this article will study the influences on consumer behaviors of IBP by observing the change of price elasticity of demand,in order to analyze whether the change of pricing mechanism makes electricity demand more sensitively.The fifth chapter studis the income redistribution effects and loss of efficiency in welfare perspective,then further investigate the influences on portfolio pricing strategy which is combined by Time-of-Use Pricing and Block Pricing.It is finded that there are many differences in the design of picing structure among different countries and districts but overall,there are some rules to follow:(1)The numbers of IBP blocks distribute the range of 2-8,mostly in the range of 2-5,and the developed country is lower than developing countries in block numbers.(2)The higher blocks number,the higher ratios of consumption and price on two and over blocks to the first block.(3)Some neighbouring countries and districts in Aisa have the highest multiples in electric quantity and lowest in price,which means the structural design is the flattest.(4)The electric quantity and price in domestic IBP is lower than international,neighborhood and developing country levels.(5)The regional Gini Coefficient and average residential electricity price affect significantly the introduction of IBP.The higher(lower)Gini Coefficient(average electricity price)is,the greater chances of IBP bring in.(6)The annual per capita electricity consumption,average temperature,electric quantity ratio of highest block to first block and average residential electricity price have great influences on block numbers.The higher average residential electricity price,the lower block number,on the contrary,the higher other factors,the higher block number.During analyzing the influences on residential electricity consumption behaviour and welfare changes,it was found that:(1)The introduction of IBP makes power demand price elasticity increases in absolute value,from-0.312 under Uniform Pricing to-lunder IBP,which is influencing electricity consumption behaviour.(2)The reason for price elasticity increasing is the changing price structure through ruling out other factors and introducing cross term.(3)Though achieving in some degrees,income redistribution effect is weak,it should strengthen with other methods.In addition,the fair realization will generate the loss of efficiency.(4)Different pricing structure effects would cancel each other out,the Time-of-Use Pricing in IBP would weaken the fair utility and be against the achievement of redistribution of income effect.In addition to electricity field,residential water,gas and some other toll collection fields also discuss the introduction of IBP.The population of IBP at home and abroad makes it necessary to study the implementation mechanism and effects.The findings may have important implications for theory and practice.