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Evaluating Thailand's Free Basic Electricity Program

Author

Listed:
  • Wichsinee Wibulpolprasert
  • Bhawin Teveyanun
  • Tanyathorn Osataphan

Abstract

This study evaluates the performance of Thailand's Free Basic Electricity (FBE) program along three dimensions: targeting effectiveness, benefit adequacy, and subsidy burden distribution. While the FBE benefits reaches the targeted population (low-income families) quite well, the benefit leakage to the non-targeted population could result in a significant increase in the overall subsidy cost. Furthermore, the current 50-unit free quota given by the FBE program is insufficient for the basic need of many low-income families. Lastly, the FBE subsidy burden falls exclusively on the industrial/commercial customers, but the cost increase has been rather small. Therefore, Thailand's FBE program can be markedly improved by introducing a more effective targeting approach to reduce leakage, which will allow the government to raise the free electricity quota while maintaining the same overall subsidy cost.

Suggested Citation

  • Wichsinee Wibulpolprasert & Bhawin Teveyanun & Tanyathorn Osataphan, 2018. "Evaluating Thailand's Free Basic Electricity Program," PIER Discussion Papers 87, Puey Ungphakorn Institute for Economic Research.
    • Handle: RePEc:pui:dpaper:87
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    File URL: https://www.pier.or.th/files/dp/pier_dp_087.pdf
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    References listed on IDEAS

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    3. Kristin Komives & Vivien Foster & Jonathan Halpern & Quentin Wodon, 2005. "Water, Electricity, and the Poor : Who Benefits from Utility Subsidies?," World Bank Publications - Books, The World Bank Group, number 6361.
    4. Foster, Vivien & Gomez-Lobo, Andres & Halpern, Jonat, 2000. "Designing direct subsidies for water and sanitation services - Panama : a case study," Policy Research Working Paper Series 2344, The World Bank.
    5. Henrik J. Kleven & Mazhar Waseem, 2013. "Using Notches to Uncover Optimization Frictions and Structural Elasticities: Theory and Evidence from Pakistan," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(2), pages 669-723.
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    More about this item

    Keywords

    Free Electricity; Electricity Subsidy; Subsidy Targeting;
    All these keywords.

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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