An Economic Investigation of Corruption and Electricity Theft
AbstractTheft and corruption are common in electricity distribution systems worldwide. We have analysed electricity theft in the framework of an individual’s choice under uncertainty and through a three-layered principalagent- client model of corruption. The study finds that an individual steals electricity only if the subjective benefits are higher than the associated costs e.g., fine imposed in case of detection or job dismissal. The fair tariffs and efficiency wages along with higher deterrence and active consumer involvement in reporting electricity theft can help in combating corruption and pilferage in electricity sector. Moreover, deterrence through increased probability of detection and conviction are important policy measures.
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Bibliographic InfoPaper provided by Pakistan Institute of Development Economics in its series PIDE-Working Papers with number 2013:92.
Length: 19 pages
Date of creation: 2013
Date of revision:
Individual’s Choice; Principal-Agent Model; Electricity Theft;
Find related papers by JEL classification:
- Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
- H8 - Public Economics - - Miscellaneous Issues
- R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis
- K1 - Law and Economics - - Basic Areas of Law
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-07-28 (All new papers)
- NEP-CWA-2013-07-28 (Central & Western Asia)
- NEP-ENE-2013-07-28 (Energy Economics)
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