The Short-term Effect of Tariff Increases on Household Electricity Consumption: Evidence from a Country in Transition

Cuong Viet Nguyen
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Cuong Viet Nguyen: Vietnam National University, Hanoi

Economic Alternatives, 2026, issue 1, 135-157

Abstract: Estimating the effect of a rise in electricity rates on household demand is challenging because of the endogeneity of tariff increases. In this study, we use a difference-in-differences method to estimate the short-term effect of an increase in residential electricity rates on monthly kWh consumption and household expenditure for electricity in Vietnam. We find that the tariff increase for electricity does not significantly change household demand in the short term, suggesting that electricity is a necessary good with low price elasticity of demand.

Keywords: household survey; Electricity; tariff increase; price elasticity; difference-in-differences; Vietnam. (search for similar items in EconPapers)
JEL-codes: C31 Q41 Q48 (search for similar items in EconPapers)
Date: 2026
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