How do urban households in China respond to increasing block pricing in electricity? Evidence from a fuzzy regression discontinuity approach
Wenxin Cai and
Energy Policy, 2017, vol. 105, issue C, 161-172
China is the largest electricity consumption country after it has passed the United States in 2011. Residential electricity consumption in China grew by 381.35% (12.85% per annum) between 2000 and 2013. In order to deal with rapid growth in residential electricity consumption, an increasing block pricing policy was introduced for residential electricity consumers in China on July 1st, 2012. Using difference-in-differences models with a fuzzy regression discontinuity design, we estimate a causal effect of price on electricity consumption for urban households during the introduction of increasing block pricing policy in Guangdong province of China. We find that consumers do not respond to a smaller (approximately 8%) increase in marginal price. However, consumers do respond to a larger increase in marginal price. An approximately 40% increase in marginal price induces an approximately 35% decrease in electricity use (284kWh per month). Our results suggest that although the increasing block pricing could affect the behavior of households with higher electricity use, there is only a limit potential to overall energy conservation.
Keywords: C54; D12; L94; Q41; Difference-in-differences; Electricity demand; Increasing block pricing; Price elasticity; Fuzzy regression discontinuity (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:105:y:2017:i:c:p:161-172
Access Statistics for this article
Energy Policy is currently edited by N. France
More articles in Energy Policy from Elsevier
Bibliographic data for series maintained by Haili He ().