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Tariffs, Enforcement, and Electricity Default: Evidence from Billing Data

Author

Listed:
  • Rodrigo Moita
  • Halisson Rodrigues
  • Thiago Rodrigues
  • Claudio Lucinda
  • Renata Lopes
  • Camila Stefanello
  • Thaís Chaves

Abstract

This paper investigates the key factors that influence electricity bill default rates among residential consumers in Brazil. We utilize a unique dataset of monthly electricity bills, which we combine with various administrative data sources. By examining the differences in electricity price increases and enforcement policies across different states and time periods, we identify their effects on default rates. Our findings indicate that an increase in electricity tariffs raises the likelihood of default. Additionally, we discover that power cuts are the most effective measure to encourage repayment, reducing the default duration (time until all outstanding balances are settled) by up to 9 percent. These results enhance our understanding of the factors affecting household default behavior and highlight their implications for ensuring electricity affordability. JEL Classification: G50 - Household Finance: General; L94 - Electric Utilities; L51 - Economics of Regulation

Suggested Citation

  • Rodrigo Moita & Halisson Rodrigues & Thiago Rodrigues & Claudio Lucinda & Renata Lopes & Camila Stefanello & Thaís Chaves, 2025. "Tariffs, Enforcement, and Electricity Default: Evidence from Billing Data," The Energy Journal, , vol. 46(6), pages 271-298, November.
    • Handle: RePEc:sae:enejou:v:46:y:2025:i:6:p:271-298
    DOI: 10.1177/01956574251368281
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    References listed on IDEAS

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    1. Genius Murwirapachena & Martin M. Kabange & Christopher I. Ifeacho, 2023. "Non-payment culture and the financial performance of urban electricity utilities in South Africa," Development Southern Africa, Taylor & Francis Journals, vol. 40(3), pages 615-631, May.
    2. Robin Burgess & Michael Greenstone & Nicholas Ryan & Anant Sudarshan, 2020. "The Consequences of Treating Electricity as a Right," Journal of Economic Perspectives, American Economic Association, vol. 34(1), pages 145-169, Winter.
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    Keywords

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    JEL classification:

    • G50 - Financial Economics - - Household Finance - - - General
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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