Abstract
This paper analyses the determinants of household electricity consumption with the focus to find the impact of government subsidies and surcharges on the demand for electricity services in the rural areas. Using surveyed household data of 332 samples, quantile regression has been employed for checking heterogeneity in electricity demand across different quantile of households. We find government subsidy has enhanced the household demand for electricity consumption with the elasticity ranging from 45 to 65 percent. Skeptically, electricity consumers of higher quantile tend to consume more even in the presence of outstanding bill while it is the opposite for low quantile group. Surprisingly, income and other socioeconomics variables don't necessarily affect the households demand for electricity. This implies demand for electricity is inelastic to income and selected socioeconomic variables in rural regions. However, electricity demand decreases for households with dwelling characteristics categorized as poorer quantile. Based on our empirical findings implications are drawn for policy makers.Keywords: Electricity; Determinants; Heterogeneity; Quantile; Subsidies; Surcharges JEL Classifications: Q4; Q48; R2; R48DOI: https://doi.org/10.32479/ijeep.11716
Highlights
In India, providing electricity service to every household started as mission in April 2005 naming it as RGGVY (Rajiv Gandhi Grameen Vidyutikiran Yojana) which was later subsumed and renamed as Deendayal Upadhayaya Gram Jyoti Yojana (DDUGJY) in August 2013 (DDUGJY, 2014)
We find that there are variations in the coefficients obtained using OLS and quantile regression
We do not find any coefficients for income which is statistically significant in OLS and in all the percentiles though a negative effect is seen for OLS, 10th and 50th quantile while an insignificant positive effect is observed for 25th, 75th and 90th quantile respectively
Summary
In India, providing electricity service to every household started as mission in April 2005 naming it as RGGVY (Rajiv Gandhi Grameen Vidyutikiran Yojana) which was later subsumed and renamed as Deendayal Upadhayaya Gram Jyoti Yojana (DDUGJY) in August 2013 (DDUGJY, 2014). Quickly in 2019 it was once again declared that all the households in India have access to electricity services barring a few remote areas of Chhattisgarh (Saubhagya, 2019). Today the average hours of electricity supplied to the rural areas in India is around 18 h in a day (PIB, 2019). The households in Assam receive around 19 h (PIB, 2019) of electricity supply per day. While it is a wellestablished fact that the socio-economic benefits of electricity services are profoundly effective; it enables a child to read for longer time for a better educational outcome; increase in business hours, productivity and profit for a firm; and empowerment of women by accessibility to television, radios and cell-phones by cultivating better decision making abilities. Electricity service in rural areas is a boon that creates avenues and opportunities for the empowerment of
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: International Journal of Energy Economics and Policy
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
