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How Effective has the Electricity Social Rate been in Reducing Energy Poverty in Spain?

Author

Listed:
  • Lisa Bagnoli
  • Salvador Bertomeu

Abstract

This paper analyzes the effectiveness of the electricity social rate, the Bono Social de Electricidad, introduced in 2009 in Spain's electricity market. It is a policy aimed at increasing the a_ordability of electricity by entailing a discount on prices for vulnerable consumers. Using data from the family budget survey from 2006 to 2017, we rely on a dfference-in-differences approach to measure its causal impact on energy poverty and to further analyze how the introduction of this measure affected the consumption behavior of households. We find that, on average, the introduction of the policy has reduced the likelihood of energy poverty of households eligible to the social rate. Nevertheless, the magnitude of the effect is quite modest as it corresponds in practice to only 59,000 households that are no longer in energy poverty as a result of the measure. We further show that, in reaction to lower effective prices, households do not increase their consumption of electricity. In other words, the increased affordability did not induce a change in the consumption behavior in terms of quantities purchased but it entirely resulted in a decrease in electricity expenditure.

Suggested Citation

  • Lisa Bagnoli & Salvador Bertomeu, 2021. "How Effective has the Electricity Social Rate been in Reducing Energy Poverty in Spain?," Working Papers ECARES 2021-05, ULB -- Universite Libre de Bruxelles.
  • Handle: RePEc:eca:wpaper:2013/319307
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