IDEAS home Printed from https://ideas.repec.org/a/spr/jqecon/v21y2023i1d10.1007_s40953-022-00327-6.html
   My bibliography  Save this article

Electricity Tariff Changes and Consumer Sentiment on Household Consumption Expenditure in Malaysia

Author

Listed:
  • Noriza Mohd Saad

    (Universiti Teknologi MARA Cawangan Kelantan)

  • Erna Farina Mohamed

    (Universiti Tenaga Nasional)

  • Mohamad Taufik Mohd Arshad

    (Tenaga Nasional Berhad)

  • Ahmad Lutfi Mohayiddin

    (Tenaga Nasional Berhad)

Abstract

Purpose This study investigates the impact of the current electricity tariff, represented by optimized tariff calculation, on Malaysian household’s consumption across different levels of income. Design/methodology/approach The input-output (IO) model has vastly been used in many energy economics literature that presented the matrix of production between various sectors in an economy. This study aggregated the 124 subsectors in IO Price Table 2015 into 12 groups of consumption of goods and services based on Household Expenditure Survey 2019 (HES 2019) to meet the study’ objectives. Findings This study found that in all simulations, high-income earners would be highly affected by the tariff changes. The lower the increment level in electricity tariff rate, the lower the magnitude would be on the changes of household expenditure level. Research limitations/implications Optimization in electricity tariff consumptions can pattern the Malaysian household’s consumption across different levels of income efficiently. Practical implications Useful to all consumer in the Malaysia economic business sector to predict their energy consumption up to optimum level. Social implications The study’s findings can benefit the society in optimiza their electricity consumption since everyone requires the energy for basic needs in their life.

Suggested Citation

  • Noriza Mohd Saad & Erna Farina Mohamed & Mohamad Taufik Mohd Arshad & Ahmad Lutfi Mohayiddin, 2023. "Electricity Tariff Changes and Consumer Sentiment on Household Consumption Expenditure in Malaysia," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 21(1), pages 175-191, March.
    • Handle: RePEc:spr:jqecon:v:21:y:2023:i:1:d:10.1007_s40953-022-00327-6
    DOI: 10.1007/s40953-022-00327-6
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s40953-022-00327-6
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s40953-022-00327-6?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Bohlmann, J.A. & Inglesi-Lotz, R., 2021. "Examining the determinants of electricity demand by South African households per income level," Energy Policy, Elsevier, vol. 148(PA).
    2. Tilov, Ivan & Farsi, Mehdi & Volland, Benjamin, 2020. "From frugal Jane to wasteful John: A quantile regression analysis of Swiss households’ electricity demand," Energy Policy, Elsevier, vol. 138(C).
    3. Helena Meier, Tooraj Jamasb, and Luis Orea, 2013. "Necessity or Luxury Good? Household Energy Spending and Income in Britain 1991-2007," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4).
    4. Valenzuela, Carlos & Valencia, Alelhie & White, Steve & Jordan, Jeffrey A. & Cano, Stephanie & Keating, Jerome & Nagorski, John & Potter, Lloyd B., 2014. "An analysis of monthly household energy consumption among single-family residences in Texas, 2010," Energy Policy, Elsevier, vol. 69(C), pages 263-272.
    5. He, Xiaoping & Reiner, David, 2016. "Electricity demand and basic needs: Empirical evidence from China's households," Energy Policy, Elsevier, vol. 90(C), pages 212-221.
    6. Feng, Zhen-Hua & Zou, Le-Le & Wei, Yi-Ming, 2011. "The impact of household consumption on energy use and CO2 emissions in China," Energy, Elsevier, vol. 36(1), pages 656-670.
    7. Druckman, A. & Jackson, T., 2008. "Household energy consumption in the UK: A highly geographically and socio-economically disaggregated model," Energy Policy, Elsevier, vol. 36(8), pages 3167-3182, August.
    8. Kavousian, Amir & Rajagopal, Ram & Fischer, Martin, 2013. "Determinants of residential electricity consumption: Using smart meter data to examine the effect of climate, building characteristics, appliance stock, and occupants' behavior," Energy, Elsevier, vol. 55(C), pages 184-194.
    9. Rahut, Dil Bahadur & Das, Sukanya & De Groote, Hugo & Behera, Bhagirath, 2014. "Determinants of household energy use in Bhutan," Energy, Elsevier, vol. 69(C), pages 661-672.
    10. Pachauri, Shonali, 2004. "An analysis of cross-sectional variations in total household energy requirements in India using micro survey data," Energy Policy, Elsevier, vol. 32(15), pages 1723-1735, October.
    11. Romero-Jordán, Desiderio & del Río, Pablo & Peñasco, Cristina, 2016. "An analysis of the welfare and distributive implications of factors influencing household electricity consumption," Energy Policy, Elsevier, vol. 88(C), pages 361-370.
    12. Salehi, Hossain & Ziari, Esfandiar Doshman & Ziaei, Mohammad Sadegh, 2017. "The Effect of Raising Electricity Price on Welfare of the Household Sector in Rural Areas of Guilan Province, Iran," International Journal of Agricultural Management and Development (IJAMAD), Iranian Association of Agricultural Economics, vol. 7(2), June.
    13. Cayla, Jean-Michel & Maizi, Nadia & Marchand, Christophe, 2011. "The role of income in energy consumption behaviour: Evidence from French households data," Energy Policy, Elsevier, vol. 39(12), pages 7874-7883.
    14. Daioglou, Vassilis & van Ruijven, Bas J. & van Vuuren, Detlef P., 2012. "Model projections for household energy use in developing countries," Energy, Elsevier, vol. 37(1), pages 601-615.
    15. Kaza, Nikhil, 2010. "Understanding the spectrum of residential energy consumption: A quantile regression approach," Energy Policy, Elsevier, vol. 38(11), pages 6574-6585, November.
    16. Tuan, Nguyen Anh & Lefevre, Thierry, 1996. "Analysis of household energy demand in Vietnam," Energy Policy, Elsevier, vol. 24(12), pages 1089-1099, December.
    17. Kasparian, Jérôme, 2009. "Contribution of crude oil price to households' budget: The weight of indirect energy use," Energy Policy, Elsevier, vol. 37(1), pages 111-114, January.
    18. Räty, R. & Carlsson-Kanyama, A., 2010. "Energy consumption by gender in some European countries," Energy Policy, Elsevier, vol. 38(1), pages 646-649, January.
    19. Sundararaj, Vinu & Rejeesh, M R, 2021. "A detailed behavioral analysis on consumer and customer changing behavior with respect to social networking sites," Journal of Retailing and Consumer Services, Elsevier, vol. 58(C).
    20. Nesbakken, Runa, 1999. "Price sensitivity of residential energy consumption in Norway," Energy Economics, Elsevier, vol. 21(6), pages 493-515, December.
    21. Miah, Md.Danesh & Foysal, Muhammad Abul & Koike, Masao & Kobayashi, Hajime, 2011. "Domestic energy-use pattern by the households: A comparison between rural and semi-urban areas of Noakhali in Bangladesh," Energy Policy, Elsevier, vol. 39(6), pages 3757-3765, June.
    22. Huang, Wen-Hsiu, 2015. "The determinants of household electricity consumption in Taiwan: Evidence from quantile regression," Energy, Elsevier, vol. 87(C), pages 120-133.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Huang, Wen-Hsiu, 2015. "The determinants of household electricity consumption in Taiwan: Evidence from quantile regression," Energy, Elsevier, vol. 87(C), pages 120-133.
    2. Małgorzata Sztorc, 2022. "The Implementation of the European Green Deal Strategy as a Challenge for Energy Management in the Face of the COVID-19 Pandemic," Energies, MDPI, vol. 15(7), pages 1-21, April.
    3. Kettani, Maryème & Sanin, Maria Eugenia, 2024. "Energy consumption and energy poverty in Morocco," Energy Policy, Elsevier, vol. 185(C).
    4. Yongxia Ding & Wei Qu & Shuwen Niu & Man Liang & Wenli Qiang & Zhenguo Hong, 2016. "Factors Influencing the Spatial Difference in Household Energy Consumption in China," Sustainability, MDPI, vol. 8(12), pages 1-20, December.
    5. Nsangou, Jean Calvin & Kenfack, Joseph & Nzotcha, Urbain & Ngohe Ekam, Paul Salomon & Voufo, Joseph & Tamo, Thomas T., 2022. "Explaining household electricity consumption using quantile regression, decision tree and artificial neural network," Energy, Elsevier, vol. 250(C).
    6. Ramachandra, T.V. & Bajpai, Vishnu & Kulkarni, Gouri & Aithal, Bharath H. & Han, Sun Sheng, 2017. "Economic disparity and CO2 emissions: The domestic energy sector in Greater Bangalore, India," Renewable and Sustainable Energy Reviews, Elsevier, vol. 67(C), pages 1331-1344.
    7. Mottaleb, Khondoker Abdul & Rahut, Dil Bahadur & Ali, Akhter, 2017. "An exploration into the household energy choice and expenditure in Bangladesh," Energy, Elsevier, vol. 135(C), pages 767-776.
    8. Wang, Yuanping & Hou, Lingchun & Hu, Lang & Cai, Weiguang & Wang, Lin & Dai, Cuilian & Chen, Juntao, 2023. "How family structure type affects household energy consumption: A heterogeneous study based on Chinese household evidence," Energy, Elsevier, vol. 284(C).
    9. Yao, Xi-Long & Liu, Yang & Yan, Xiao, 2014. "A quantile approach to assess the effectiveness of the subsidy policy for energy-efficient home appliances: Evidence from Rizhao, China," Energy Policy, Elsevier, vol. 73(C), pages 512-518.
    10. Javier Bueno & Desiderio Romero-Jordán & Pablo del Río, 2020. "Analysing the Drivers of Electricity Demand in Spain after the Economic Crisis," Energies, MDPI, vol. 13(20), pages 1-18, October.
    11. Sijousa Basumatary & Mridula Devi & Konita Basumatary, 2021. "Determinants of Household Electricity Demand in Rural India: A Case Study of the Impacts of Government Subsidies and Surcharges," International Journal of Energy Economics and Policy, Econjournals, vol. 11(6), pages 243-249.
    12. Rahut, Dil Bahadur & Behera, Bhagirath & Ali, Akhter & Marenya, Paswel, 2017. "A ladder within a ladder: Understanding the factors influencing a household's domestic use of electricity in four African countries," Energy Economics, Elsevier, vol. 66(C), pages 167-181.
    13. Bakaloglou, Salomé & Charlier, Dorothée, 2021. "The role of individual preferences in explaining the energy performance gap," Energy Economics, Elsevier, vol. 104(C).
    14. Zhu, Mengshu & Huang, Ying & Wang, Si-Nuo & Zheng, Xinye & Wei, Chu, 2023. "Characteristics and patterns of residential energy consumption for space cooling in China: Evidence from appliance-level data," Energy, Elsevier, vol. 265(C).
    15. Belaïd, Fateh, 2016. "Understanding the spectrum of domestic energy consumption: Empirical evidence from France," Energy Policy, Elsevier, vol. 92(C), pages 220-233.
    16. Wang, Xia & Ding, Chao & Zhou, Mao & Cai, Weiguang & Ma, Xianrui & Yuan, Jiachen, 2023. "Assessment of space heating consumption efficiency based on a household survey in the hot summer and cold winter climate zone in China," Energy, Elsevier, vol. 274(C).
    17. Min-Jeong Kim, 2020. "Determining the Relationship between Residential Electricity Consumption and Factors: Case of Seoul," Sustainability, MDPI, vol. 12(20), pages 1-14, October.
    18. Tilov, Ivan & Farsi, Mehdi & Volland, Benjamin, 2020. "From frugal Jane to wasteful John: A quantile regression analysis of Swiss households’ electricity demand," Energy Policy, Elsevier, vol. 138(C).
    19. Rahut, Dil Bahadur & Behera, Bhagirath & Ali, Akhter, 2017. "Factors determining household use of clean and renewable energy sources for lighting in Sub-Saharan Africa," Renewable and Sustainable Energy Reviews, Elsevier, vol. 72(C), pages 661-672.
    20. Misbah Aslam & Eatzaz Ahmad, 2018. "Impact of Ageing and Generational Effects on Household Energy Consumption Behavior: Evidence from Pakistan," Energies, MDPI, vol. 11(8), pages 1-20, August.

    More about this item

    Keywords

    Input-output (IO); Electricity tariff; Household consumption; Household expenditure; Scenario analysis;
    All these keywords.

    JEL classification:

    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:jqecon:v:21:y:2023:i:1:d:10.1007_s40953-022-00327-6. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.