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

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  • Salim Turdaliev

    (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Smetanovo nábřeží 6, 110 01 Prague, Czech Republic)

Abstract

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.

Suggested Citation

  • Salim Turdaliev, 2021. "Increasing Block Rate Electricity Pricing and Propensity to Purchase Electrical Appliances: Evidence from a Natural Experiment in Russia," Energies, MDPI, vol. 14(21), pages 1-20, October.
    • Handle: RePEc:gam:jeners:v:14:y:2021:i:21:p:6954-:d:662393
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