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Household Electricity Default in Brazil: Evidence from Billing Data

Author

Listed:
  • Rodrigo Moita
  • Halisson Rodrigues
  • Thiago Rodrigues
  • Claudio Lucinda
  • Renata Lopes
  • Camila Stefanello
  • Thais Chaves

Abstract

This paper aims to examine the key factors influencing default rates among residential electricity consumers in Brazil. To achieve this, we use a unique dataset comprising monthly electricity bills, and we combine it with several administrative data sources. By leveraging the policy designs adopted by the regulator, we employ a causal inference approach to identify the effects of tariff changes and enforcement actions implemented by electricity distributors on default rates. Our findings indicate that an increase in electricity tariffs raises the likelihood of default. Furthermore, the results reveal that power cuts represent the primary tool for combating default, and allowing such cuts can reduce the default duration by up to 9%. These findings contribute to the understanding of the factors influencing household default behavior and their implications for ensuring electricity affordability.

Suggested Citation

  • Rodrigo Moita & Halisson Rodrigues & Thiago Rodrigues & Claudio Lucinda & Renata Lopes & Camila Stefanello & Thais Chaves, 2024. "Household Electricity Default in Brazil: Evidence from Billing Data," Working Papers, Department of Economics 2024_05, University of São Paulo (FEA-USP).
    • Handle: RePEc:spa:wpaper:2024wpecon5
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    File URL: http://www.repec.eae.fea.usp.br/documentos/Moita_Rodrigues_Lucinda_Lopes_Stefanello_Chaves_05WP.pdf
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    References listed on IDEAS

    as
    1. Szabó, Andrea & Ujhelyi, Gergely, 2015. "Reducing nonpayment for public utilities: Experimental evidence from South Africa," Journal of Development Economics, Elsevier, vol. 117(C), pages 20-31.
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    More about this item

    Keywords

    electricity tariff; electricity bill default; power cuts;
    All these keywords.

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • G50 - Financial Economics - - Household Finance - - - General

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