EconPapers    
Economics at your fingertips  
 

Reforming residential electricity tariff in China: Block tariffs pricing approach

Chuanwang Sun () and Boqiang Lin ()

Energy Policy, 2013, vol. 60, issue C, 741-752

Abstract: The Chinese households that make up approximately a quarter of world households are facing a residential power tariff reform in which a rising block tariff structure will be implemented, and this tariff mechanism is widely used around the world. The basic principle of the structure is to assign a higher price for higher income consumers with low price elasticity of power demand. To capture the non-linear effects of price and income on elasticities, we set up a translog demand model. The empirical findings indicate that the higher income consumers are less sensitive than those with lower income to price changes. We further put forward three proposals of Chinese residential electricity tariffs. Compared to a flat tariff, the reasonable block tariff structure generates more efficient allocation of cross-subsidies, better incentives for raising the efficiency of electricity usage and reducing emissions from power generation, which also supports the living standards of low income households.

Keywords: Block tariffs; Residential electricity; Price elasticity of power demand (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (39) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301421513003558
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:60:y:2013:i:c:p:741-752

DOI: 10.1016/j.enpol.2013.05.023

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 ().

 
Page updated 2020-10-31
Handle: RePEc:eee:enepol:v:60:y:2013:i:c:p:741-752