The long-run value of electricity reliability in India

Shefali Khanna and Kevin Rowe

Resource and Energy Economics, 2024, vol. 77, issue C

Abstract: This paper evaluates residential consumers’ electricity consumption and appliance investment responses to power outages from 2015 to 2019 in Delhi, India. Our empirical strategy takes advantage of features of the electricity distribution network in the service territory of one of Delhi’s regulated distribution utilities that exposes similar customers to plausibly exogenous annual variation in electricity reliability. Using original household survey data and four years of billing and power outage records for more than one million customers, we estimate that an additional hour per month of power outages reduced electricity consumption by 4.8 percent. These estimates suggest that households are willing to pay USD 1.50 per kWh of lost consumption, which is more than 25 times the average price they pay for grid electricity.

Keywords: Regulated industries; Utilities; Energy demand; Energy markets (search for similar items in EconPapers)
JEL-codes: L51 L94 Q41 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:resene:v:77:y:2024:i:c:s0928765524000010

DOI: 10.1016/j.reseneeco.2024.101425

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