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Residential Electricity Pricing in China

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  • Qiaoyuan Lin
  • Marian Rizov
  • Marie Wong

Abstract

This article evaluates the new residential pricing system for electricity in China by examining price and income elasticity of demand by household type. We used prereform annual panel data for 29 provinces from 1998 to 2011, applying feasible generalized least squares models. The price and income elasticities for household sectors are -0.412, and 1.476 at the national level, -0.300 and 1.550 in urban areas, and -0.522 and 1.093 in rural areas. With regional effects, the price and income elasticities are -0.146 and 1.286 for urban households in coastal provinces and -0.772 and 1.259 for urban households in inland provinces. The empirical results reveal that there is important heterogeneity in the responsiveness to electricity price changes by household income level and location.

Suggested Citation

  • Qiaoyuan Lin & Marian Rizov & Marie Wong, 2014. "Residential Electricity Pricing in China," Chinese Economy, Taylor & Francis Journals, vol. 47(2), pages 41-74, March.
    • Handle: RePEc:mes:chinec:v:47:y:2014:i:2:p:41-74
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    Cited by:

    1. Irfan, Muhammad & Cameron, Michael P. & Hassan, Gazi, 2018. "Household energy elasticities and policy implications for Pakistan," Energy Policy, Elsevier, vol. 113(C), pages 633-642.
    2. Tumanyants, Karen (Туманянц, Карэн), 2020. "Income Residential Demand Elasticities for Electricity: Do We Need to Differentiate the Tariff? [Эластичность Спроса Населения На Электроэнергию По Доходам: Нужно Ли Диверсифицировать Тариф?]," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 4, pages 110-137, August.
    3. Le Viet Phu, 2020. "Electricity price and residential electricity demand in Vietnam," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 22(4), pages 509-535, October.
    4. Joos, Michael & Staffell, Iain, 2018. "Short-term integration costs of variable renewable energy: Wind curtailment and balancing in Britain and Germany," Renewable and Sustainable Energy Reviews, Elsevier, vol. 86(C), pages 45-65.
    5. Wu, Ya & Zhang, Li, 2017. "Evaluation of energy saving effects of tiered electricity pricing and investigation of the energy saving willingness of residents," Energy Policy, Elsevier, vol. 109(C), pages 208-217.
    6. Vigani,Mauro & Dudu,Hasan, 2021. "Demand Analysis of Multiple Goods and Services in Vietnam," Policy Research Working Paper Series 9803, The World Bank.

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