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HOUSEHOLD-SPECIFIC SOCIAL NORMS, THE ELASTICITY OF ELECTRICITY DEMAND, AND CARBON EMISSION REDUCTIONS IN THE RESIDENTIAL SECTOR: EVIDENCE FROM A NATURAL EXPERIMENT IN RUSSIA

Salim Turdaliev

Climate Change Economics (CCE), 2023, vol. 14, issue 03, 1-29

Abstract: In this paper, I estimate the price elasticity of residential electricity demand using household-level panel data for Russia. The study takes advantage of the variation in tariffs across regions and over time, as well as the introduction of increasing block rate (IBR) schemes in a number of regions. I show that in those regions consumers appear to be aware of the block cut-offs, even though the latter are based on the prescribed social norms and are household and dwelling specific, to the point that there are up to a total of 31 different tier cut-offs. Based on these results, I estimate the price elasticity of electricity demand to be around −0.1. I also predict the associated changes in electricity consumption, CO2 emissions, and revenues if similar IBR policies are implemented countrywide.

Keywords: Residential electricity demand; post-Soviet economy; social norms; natural experiment; increasing block rates; CO2 emissions (search for similar items in EconPapers)
JEL-codes: L94 L98 Q41 Q48 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1142/S2010007823500173

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