Energies (Oct 2021)

Increasing Block Rate Electricity Pricing and Propensity to Purchase Electrical Appliances: Evidence from a Natural Experiment in Russia

  • Salim Turdaliev

DOI
https://doi.org/10.3390/en14216954
Journal volume & issue
Vol. 14, no. 21
p. 6954

Abstract

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This paper provides empirical evidence on the relationship between the increasing-block-rate (IBR) pricing of electricity and the propensity of households to buy major electrical appliances. I use a variation from a natural experiment in Russia that introduced IBR pricing for residential electricity in a number of experimental regions in 2013. The study employs household-level panel data, which records, among others, whether the household has purchased any major electrical appliances during the last three months. Using a difference-in-differences specification, I show that the purchase of major electrical appliances in the regions with IBR pricing has increased by more than 20% (or more than two percentage points). The findings suggest that price-based energy policies may be an effective tool in shaping the behaviour of households.

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