Time-varying pricing may increase total electricity consumption: Evidence from Costa Rica

• Similar to previous studies, we find that implementing time-varying pricing reduces electricity consumption during peak hours. In contrast with may increase total consumption. To our knowledge, provide the first evaluation of a schedule for in residential sector non-rich country. We study implementation (TVP) program by major utility Costa Rica. Because particular features data, use recently developed understanding two-way fixed effects differences-in-differences estimator along event-study specifications interpret results. research, peak-hours. However, increases With stylized economic model, show how these seemingly conflicted results not be at odds. The key element model is research used data from rich countries, which heating and cooling devices drives consumption, but tropical middle-income country, where very few households have or devices. Since there much room technological changes (which might reduce all times), behavioral hours are enough offset increased off-peak (when cheaper). Our serve as cautionary piece evidence policy makers interested reducing hours—the goal can potentially achieved TVP, cost