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Redistribution Through Efficiency: Theory and Evidence from Three Electricity Markets

Matti Liski & Iivo Vehviläinen

RAND Journal of Economics2026https://doi.org/10.1111/1756-2171.70048article
AJG 4ABDC A*
Weight
0.50

Abstract

Using micro‐data on over 160 million bids to buy and sell from three major electricity markets, we study efficiency improvements resulting from technologies such as storage. Consumer benefits arise not from stabilized prices but from changes in general price levels. To unpack the findings, we develop a set of price‐theory results, demonstrating that the convexity of market excess demand, derived from the bids, serves as a novel measure that strongly predicts consumer benefits across all markets. This analysis highlights that even small allocative improvements can lead to significant redistributions of surplus, ultimately benefitting consumers.

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https://doi.org/https://doi.org/10.1111/1756-2171.70048

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@article{matti2026,
  title        = {{Redistribution Through Efficiency: Theory and Evidence from Three Electricity Markets}},
  author       = {Matti Liski & Iivo Vehviläinen},
  journal      = {RAND Journal of Economics},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1111/1756-2171.70048},
}

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Redistribution Through Efficiency: Theory and Evidence from Three Electricity Markets

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.