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How can electricity prices regulate residential electricity consumption more effectively? Evidence from first-tier cities in China

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  • Yang, Mengqi
  • Lin, Boqiang

Abstract

Existing studies have disputed whether electricity prices can effectively regulate residential electricity consumption. Exploring how to improve the effectiveness of electricity price regulation is of practical significance for formulating residential electricity price policy. The authors collected a total of 4,738 samples from first-tier cities after China's large-scale electricity price adjustment in 2019, discussed how electricity payment mode serves as a potential boundary condition for electricity prices to affect residential electricity consumption, and explored electricity-saving habits as the influencing mechanism using the bootstrap method. The findings included (1) The effect of electricity prices on electricity consumption was insignificant overall. (2) The effect became significant for residents adopting the “use first, pay later” payment mode but not significant for those adopting the “pay first, use later” mode. (3) For residents adopting the “use first, pay later” mode, electricity-saving habits are the mechanism by which electricity prices affect electricity consumption. This study explains to some extent the inconsistencies in the findings of previous studies and provides targeted recommendations for the formulation of residential electricity pricing policies.

Suggested Citation

  • Yang, Mengqi & Lin, Boqiang, 2025. "How can electricity prices regulate residential electricity consumption more effectively? Evidence from first-tier cities in China," Energy, Elsevier, vol. 319(C).
    • Handle: RePEc:eee:energy:v:319:y:2025:i:c:s0360544225006310
    DOI: 10.1016/j.energy.2025.134989
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