Exploring Increasing Urban Resident Electricity Consumption: The Spatial Spillover Effect of Resident Income

Abstract

The impact of average wages on electricity consumption among urban residents in China has generated many fascinating debates for scholarly research, but only a few studies have considered the spatial spillover effect of average wages on residential electricity consumption. With the use of city-level panel data from 278 Chinese cities spanning 2005 to 2016, this preliminary study explores the impacts of the average wage on residential electricity consumption. Specifically, based on the spatial Durbin model with fixed effects, three different spatial weight matrices (the economic distance, the inverse distance, and the four nearest neighbours) are utilised to check the robustness of the results under different standards. The results show that the residential electricity consumption of each city increased during the observation period, presenting obvious spatial correlations. Secondly, the average wage of residents had a positive spatial spillover effect, which promoted the residential electricity consumption of both local and surrounding cities. Thirdly, the population density, electricity intensity, educational level of urban residents, and per capita household liquefied petroleum gas consumption in urban areas are key factors influencing residential electricity consumption. Therefore, improving the educational level of urban residents and reducing the electricity intensity can help reduce electricity consumption by residents in China. This paper also presents policy recommendations.