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Evaluating Thailand's Free Basic Electricity Program

Wichsinee Wibulpolprasert, Bhawin Teveyanan and Tanyathorn Osataphan
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Wichsinee Wibulpolprasert: Thailand Development Research Institute
Bhawin Teveyanan: Thailand Development Research Institute
Tanyathorn Osataphan: Thailand Development Research Institute

PIER Discussion Papers from Puey Ungphakorn Institute for Economic Research

Abstract: This study evaluates the performance of Thailand's Free Basic Electricity (FBE) program along three dimensions: targeting effectiveness, benefit adequacy, and subsidy burden distribution. While the FBE benefits reaches the targeted population (low-income families) quite well, the benefit leakage to the non-targeted population could result in a significant increase in the overall subsidy cost. Furthermore, the current 50-unit free quota given by the FBE program is insufficient for the basic need of many low-income families. Lastly, the FBE subsidy burden falls exclusively on the industrial/commercial customers, but the cost increase has been rather small. Therefore, Thailand's FBE program can be markedly improved by introducing a more effective targeting approach to reduce leakage, which will allow the government to raise the free electricity quota while maintaining the same overall subsidy cost.

Keywords: Free Electricity; Electricity Subsidy; Subsidy Targeting (search for similar items in EconPapers)
JEL-codes: L94 I3 Q48 (search for similar items in EconPapers)
Pages: 23 page
Date: 2018-06, Revised 2018-06
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Published in PIER Discussion Paper Series

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