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OVERVIEW

What will happen to residential demand for electricity if the government of Vietnam wants to increase electricity tariffs to cost recovery, a level estimated at 20 percent above current prices? To answer this research question, a study was conducted to measure the demand elasticity of the electricity consumption in Vietnam and characterize it. The study consists of enrolling 2,630 households selected in the districts of Vinh Yen, Phuc Yen in some energy conservation and subsidy programs and evaluating the impact of these programs on electricity consumption. To study the impact of price increase, changes in prices across households were randomly generated. There are two main issues: (i) the current price schedule in Vietnam is quite complex so it was simplified through targeted subsidies, and (ii) we are not allowed to increase the price, so we replaced a price increase by a “conservation bonus”.

The impact evaluation is done using household data collected for the purpose of the study, alongside electricity consumption data collected by Vinh Phuc PC to monitor the change in the behaviour of electricity consumption when electricity prices increase or decrease. The study consists of three phases: Sampling, Household appliances survey, Experiment implementation.

Client:

World_Bank

The World Bank Group

Time:

March 2017 – December 2017

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