European Business Schools Librarian's Group
Department of Economics Working Papers,
Vienna University of Economics and Business, Department of Economics
No 372: The Gas Price Brake Increases Gas Prices: Empirical Evidence
Lukas Brunninger (), Markus Dertwinkel-Kalt (), Klaus Gugler () and Sven Heim ()
Additional contact information
Lukas Brunninger: Department of Economics, Vienna University of Economics and Business
Markus Dertwinkel-Kalt: University of Münster and Max Planck Institute for Collective Goods
Klaus Gugler: Department of Economics, Vienna University of Economics and Business
Sven Heim: Mines Paris – PSL, ZEW – Leibniz Centre for European Economic Research Mannheim and CEPR
Abstract: In the aftermath of the Russian invasion in Ukraine and rising gas prices, the “gas Price brake” was implemented in Germany. We employ a difference-in-differences Approach and analyze data on offered gas contracts from two countries with comparable gas markets, where one country (Germany) has implemented the gas price brake and the other (Austria) has not. Our findings support the theoretical prediction, indicating that the gas price brake led to an increase in total annual gas costs in Germany. This increase is entirely attributable to incumbents increasing counterfactual gas prices by up to 90%. Non-incumbents do not ’milk‘ the brake.
Keywords: Energy Policy, Gas Price Brake, Moral Hazard, Incumbents
JEL-codes: D04; Q40; Q48; L50 October 2024
Note: PDF Document
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WP372.pdf
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