TY - JOUR
T1 - Consumer electricity and gas prices across Australian capital cities
T2 - structural breaks, effects of policy reforms and interstate differences
AU - Valadkhani, Abbas
AU - Nguyen, Jeremy
AU - Smyth, Russell
PY - 2018/5/1
Y1 - 2018/5/1
N2 - We detect, and analyze, the most significant structural changes in the quarterly growth rate of consumer electricity and gas prices in Australia and estimate their corresponding seasonal effects. To do so, we apply the general modelling framework of the Bai-Perron breaking regression to all available quarterly data for capital cities, individually, and Australia as a whole (1989Q3–2017Q2). Retail energy prices in most Australian states were deregulated in the 2000s. We find that increases in average quarterly growth rates of electricity and gas prices consistently occurred in the third (September) quarter, and find very few instances of increases in any other quarters of the year. In the post-deregulation period, price increases are significantly higher than in the pre-deregulation era. Results for some capital cities are stark: in Perth, third-quarter growth in electricity prices has been five times higher after the structural break. In Australia, as a whole, third-quarter growth in gas prices has been three times higher after the structural break. We discuss several possible explanations for energy price rises in the period since deregulation.
AB - We detect, and analyze, the most significant structural changes in the quarterly growth rate of consumer electricity and gas prices in Australia and estimate their corresponding seasonal effects. To do so, we apply the general modelling framework of the Bai-Perron breaking regression to all available quarterly data for capital cities, individually, and Australia as a whole (1989Q3–2017Q2). Retail energy prices in most Australian states were deregulated in the 2000s. We find that increases in average quarterly growth rates of electricity and gas prices consistently occurred in the third (September) quarter, and find very few instances of increases in any other quarters of the year. In the post-deregulation period, price increases are significantly higher than in the pre-deregulation era. Results for some capital cities are stark: in Perth, third-quarter growth in electricity prices has been five times higher after the structural break. In Australia, as a whole, third-quarter growth in gas prices has been three times higher after the structural break. We discuss several possible explanations for energy price rises in the period since deregulation.
KW - Australia
KW - Consumer energy prices
KW - Electricity price
KW - Gas price
KW - Structural break
UR - http://www.scopus.com/inward/record.url?scp=85046649714&partnerID=8YFLogxK
U2 - 10.1016/j.eneco.2018.04.038
DO - 10.1016/j.eneco.2018.04.038
M3 - Article
AN - SCOPUS:85046649714
VL - 72
SP - 365
EP - 375
JO - Energy Economics
JF - Energy Economics
SN - 0140-9883
ER -