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Income shocks and residential energy consumption: Evidence from Vietnam

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  • Nguyen, Cuong Viet

Abstract

Estimating the income effect on household demand for energy is challenging due to the endogeneity of household income. Using lottery winnings as an exogenous shock, we demonstrate how an income shock affects residential energy consumption in Vietnam. Our findings indicate that lottery winnings reduce the consumption of traditional energy sources, including wood and coal, while increasing electricity consumption. A 1 % increase in lottery winnings reduces expenditure on wood and coal by 0.036 % and increases expenditure on electricity by 0.021 %. Additionally, we find that lottery winnings lead to increased ownership of electrical appliances, thereby indirectly raising household electricity consumption.

Suggested Citation

  • Nguyen, Cuong Viet, 2025. "Income shocks and residential energy consumption: Evidence from Vietnam," Energy Economics, Elsevier, vol. 149(C).
    • Handle: RePEc:eee:eneeco:v:149:y:2025:i:c:s014098832500605x
    DOI: 10.1016/j.eneco.2025.108778
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    Keywords

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    JEL classification:

    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • P43 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Finance; Public Finance
    • O22 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Project Analysis

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