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Understanding electricity billing preferences in rural and urban India: Evidence from a conjoint experiment

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  • Wong, Jason Chun Yu
  • Blankenship, Brian
  • Urpelainen, Johannes
  • Balani, Kanika
  • Ganesan, Karthik
  • Bharadwaj, Kapardhi

Abstract

To address issues of non-payment, high costs, and theft, paying a fixed fee for electricity is common among many developing countries. We use a conjoint experiment to study electricity billing preferences among urban and rural communities in Uttar Pradesh, India. We find that 59.5% of respondents (95% CI: 58.2%–60.9%) prefer consumption-based tariffs as opposed to fixed fee ones, favoring lower base charges among a number of factors. We additionally use Bayesian Additive Regression Trees to test for heterogeneous treatment effects. Respondents with more appliances, using more hours of electricity, and who live in rural areas with meters prefer consumption-based plans with lower base rates. Our results suggest that policy reforms should move beyond fixed rate schemes especially if respondents would accept higher unit tariffs with improved service.

Suggested Citation

  • Wong, Jason Chun Yu & Blankenship, Brian & Urpelainen, Johannes & Balani, Kanika & Ganesan, Karthik & Bharadwaj, Kapardhi, 2022. "Understanding electricity billing preferences in rural and urban India: Evidence from a conjoint experiment," Energy Economics, Elsevier, vol. 106(C).
    • Handle: RePEc:eee:eneeco:v:106:y:2022:i:c:s0140988321005831
    DOI: 10.1016/j.eneco.2021.105735
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    More about this item

    Keywords

    Billing; Consumer preferences; Rural–urban differences; Universal access;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O21 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Planning Models; Planning Policy
    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • D10 - Microeconomics - - Household Behavior - - - General
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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