Electricity Tariff Changes and Consumer Sentiment on Household Consumption Expenditure in Malaysia

Noriza Mohd Saad (), Erna Farina Mohamed, Mohamad Taufik Mohd Arshad and Ahmad Lutfi Mohayiddin
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Noriza Mohd Saad: Universiti Teknologi MARA Cawangan Kelantan
Erna Farina Mohamed: Universiti Tenaga Nasional
Mohamad Taufik Mohd Arshad: Tenaga Nasional Berhad
Ahmad Lutfi Mohayiddin: Tenaga Nasional Berhad

Journal of Quantitative Economics, 2023, vol. 21, issue 1, No 6, 175-191

Abstract: Abstract Purpose This study investigates the impact of the current electricity tariff, represented by optimized tariff calculation, on Malaysian household’s consumption across different levels of income. Design/methodology/approach The input-output (IO) model has vastly been used in many energy economics literature that presented the matrix of production between various sectors in an economy. This study aggregated the 124 subsectors in IO Price Table 2015 into 12 groups of consumption of goods and services based on Household Expenditure Survey 2019 (HES 2019) to meet the study’ objectives. Findings This study found that in all simulations, high-income earners would be highly affected by the tariff changes. The lower the increment level in electricity tariff rate, the lower the magnitude would be on the changes of household expenditure level. Research limitations/implications Optimization in electricity tariff consumptions can pattern the Malaysian household’s consumption across different levels of income efficiently. Practical implications Useful to all consumer in the Malaysia economic business sector to predict their energy consumption up to optimum level. Social implications The study’s findings can benefit the society in optimiza their electricity consumption since everyone requires the energy for basic needs in their life.

Keywords: Input-output (IO); Electricity tariff; Household consumption; Household expenditure; Scenario analysis (search for similar items in EconPapers)
JEL-codes: L95 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s40953-022-00327-6

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