Residential electricity consumption after the reform of tiered pricing for household electricity in China

After almost three years of preparation, the tiered pricing for household electricity (TPHE) was implemented across China in July 2012. The feedbacks of household electricity consumption to the new pricing policy are investigated in this paper based on the micro household-level data from China's Residential Energy Consumption Survey (CRECS). We document that electricity consumption of 82% surveyed households did not affected by the TPHE, which is in conformity with the principle that the TPHE policy based on. More importantly, factors that influence elasticity of household electricity consumption are examined by empirical model in this paper. Results indicate that factors such as the energy price, household income, and demographic attributes have significant impacts on residential electricity consumption. Further discussion outcomes show that the publicity of the TPHE, energy price and some other factors are strongly correlated with the probability that households change the inefficient and lavish pattern of electricity consumption. Future directions for the design and improvement of residential electricity pricing reform are thus suggested.