Household response to optional peak-load pricing of electricity

I investigate the impacts of voluntary time-of-day (TOD) rates on residenti al demand for electricity My analysis is based on a sample of a survey, whi ch provides cross-sectional data on electricity consumption and economic/de mographic features for both TOD and non-TOD households in Japan. This infor mation is used to develop an almost ideal demand system for the TOD electri city consumption during the summer. The results show that (1) household res ponse to the high price of the peak period is relatively modest, and (2) th e relative magnitudes of the price and selection effects depend on the owne rship of water heaters.