Socio-economic determinants of electricity prices in New Brunswick: a hedonic price approach
University of New Brunswick
Currently, electricity markets around the world are being reformed to provide more competition in generation and more options and alternatives for customers to choose electricity supplier from various generating companies. Therefore, identification of customer needs is the biggest challenge for those companies. Our study addresses this issue for the New Brunswick electricity market via hedonic price approach – one of the most popular revealed preferences methods. According to this approach, the price of electricity is viewed through its attributes which are divided into four groups: economic, technical, social and environmental. Our empirical analysis has shown that demand side determinants of electricity are as significant as supply side. In addition to traditional determinants such as household income and technical characteristics, environmental and climate variables have also a significant influence on electricity prices which calls for the design of new electricity products.