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Increasing Block Rate Electricity Pricing and Propensity to Purchase Electric Appliances: Evidence from a Natural Experiment

Author

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  • Salim Turdaliev

    (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic)

Abstract

This paper provides empirical evidence on the relationship between increasing-block-rate (IBR) pricing of electricity and the propensity of households to buy major electric appliances. I use variation from a natural experiment in Russia that introduced IBR pricing for residential electricity in a number of experimental regions in 2013. The study employs household-level panel data which records, among others, whether the household has purchased any major electric appliances during the last 3 months. Using difference-in-differences specification I show that in the regions with IBR pricing the purchase of major electric appliances has increased by more than 25 percent (2 percentage points). The findings suggest that price-based energy policies may be an effective tool in shaping the behavior of households.

Suggested Citation

  • Salim Turdaliev, 2021. "Increasing Block Rate Electricity Pricing and Propensity to Purchase Electric Appliances: Evidence from a Natural Experiment," Working Papers IES 2021/27, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Jul 2021.
    • Handle: RePEc:fau:wpaper:wp2021_27
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    File URL: https://ies.fsv.cuni.cz/en/veda-vyzkum/working-papers/6459
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    Citations

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    Cited by:

    1. António Gomes Martins & Luís Pires Neves & José Luís Sousa, 2023. "Electricity Demand Side Management," Energies, MDPI, vol. 16(16), pages 1-3, August.

    More about this item

    Keywords

    appliances; increasing-block-rate tariff; electricity prices; energy efficiency gap;
    All these keywords.

    JEL classification:

    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • D1 - Microeconomics - - Household Behavior
    • D9 - Microeconomics - - Micro-Based Behavioral Economics

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