School of Economics, Kwansai Gakuin University
Faculty of Economics, University of Tokyo
Faculty of Economics, Sophia University
抄録
The decreasing block rate pricing is a nonlinear price system often used for public utility services. The residential gas services in Japan and the United Kingdom are provided under this price schedule. The discrete/continuous choice approach is used to analyze the demand under decreasing block rate pricing. However, the nonlinearity problem, which has not been examined in previous studies, arises because a consumer's budget set (a set of affordable consumption amounts) is nonconvex and, hence, the resulting model includes highly nonlinear functions. To address this problem, we propose a feasible, efficient method of demand on the nonconvex budget. The advantages of our method are as follows: (i) the construction of an efficient Markov chain Monte Carlo algorithm with an efficient blanket based on the Hermite-Hadamard integral inequality and the power-mean inequality, (ii) the explicit consideration of the (highly nonlinear) separability condition, which often makes numerical likelihood maximization difficult, and (iii) the introduction of normal disturbance into the discrete/continuous choice model on the nonconvex budget set. The proposed method is applied to estimate the Japanese residential gas demand function and evaluate the effect of price schedule changes as a policy experiment.
内容記述
本文フィルはリンク先を参照のこと
雑誌名
Discussion paper series. CIRJE-F
巻
CIRJE-F-881
発行年
2013-03
書誌レコードID
AA11450569
フォーマット
application/pdf
出版者
日本経済国際共同センター
出版者別名
Center for International Research on the Japanese Economy
A Discrete/Continuous Choice Model on the Nonconvex Budget Set
