The consequences of increasing block tariffs on the distribution of residential electricity subsidies in Addis Ababa, EthiopiaCitation formats

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The consequences of increasing block tariffs on the distribution of residential electricity subsidies in Addis Ababa, Ethiopia. / Cardenas, Helena; Whittington, Dale.

In: Energy Policy, 2019, p. 783-795.

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@article{2ed56e93ad1847adb2e879d0790f2e69,
title = "The consequences of increasing block tariffs on the distribution of residential electricity subsidies in Addis Ababa, Ethiopia",
abstract = "This study evaluates the distribution of electricity subsidies to residential customers in Addis Ababa, Ethiopia in 2016 that results from the current increasing block tariff (IBT) structure. Customer billing data supplied by the electricity utility was matched with socioeconomic information collected from a survey of 987 households, and used with a utility-specific estimate of the costs of electricity service to estimate household-specific subsidies. The analysis differentiates between primary customers, who own an electricity account, and nonprimary customers, who pay a primary account holder, and presents the first detailed analysis of the incidence of subsidies provided to households with private versus shared electricity connections. Results show that households in the poorest quintile received 7{\%} of the total subsidy, while households in the wealthiest quintile received 37{\%}. The majority of households with shared connections were in poorer quintiles, and 80{\%} in the poorest quintile were nonprimary customers. The regressive outcomes of the IBT structure are explained by two of its attributes: (1) the volumetric rates in all tariff blocks are substantially below the total average cost of delivery of the service; and (2) there is only a moderate association between electricity consumption and household wealth.",
keywords = "Electricity residential consumption, Increasing block tariff, Subsidy leakage, Subsidy incidence, Addis Ababa, Ethiopia",
author = "Helena Cardenas and Dale Whittington",
year = "2019",
doi = "10.1016/j.enpol.2019.01.033",
language = "English",
pages = "783--795",
journal = "Energy Policy",
issn = "0301-4215",
publisher = "Elsevier BV",

}

RIS

TY - JOUR

T1 - The consequences of increasing block tariffs on the distribution of residential electricity subsidies in Addis Ababa, Ethiopia

AU - Cardenas, Helena

AU - Whittington, Dale

PY - 2019

Y1 - 2019

N2 - This study evaluates the distribution of electricity subsidies to residential customers in Addis Ababa, Ethiopia in 2016 that results from the current increasing block tariff (IBT) structure. Customer billing data supplied by the electricity utility was matched with socioeconomic information collected from a survey of 987 households, and used with a utility-specific estimate of the costs of electricity service to estimate household-specific subsidies. The analysis differentiates between primary customers, who own an electricity account, and nonprimary customers, who pay a primary account holder, and presents the first detailed analysis of the incidence of subsidies provided to households with private versus shared electricity connections. Results show that households in the poorest quintile received 7% of the total subsidy, while households in the wealthiest quintile received 37%. The majority of households with shared connections were in poorer quintiles, and 80% in the poorest quintile were nonprimary customers. The regressive outcomes of the IBT structure are explained by two of its attributes: (1) the volumetric rates in all tariff blocks are substantially below the total average cost of delivery of the service; and (2) there is only a moderate association between electricity consumption and household wealth.

AB - This study evaluates the distribution of electricity subsidies to residential customers in Addis Ababa, Ethiopia in 2016 that results from the current increasing block tariff (IBT) structure. Customer billing data supplied by the electricity utility was matched with socioeconomic information collected from a survey of 987 households, and used with a utility-specific estimate of the costs of electricity service to estimate household-specific subsidies. The analysis differentiates between primary customers, who own an electricity account, and nonprimary customers, who pay a primary account holder, and presents the first detailed analysis of the incidence of subsidies provided to households with private versus shared electricity connections. Results show that households in the poorest quintile received 7% of the total subsidy, while households in the wealthiest quintile received 37%. The majority of households with shared connections were in poorer quintiles, and 80% in the poorest quintile were nonprimary customers. The regressive outcomes of the IBT structure are explained by two of its attributes: (1) the volumetric rates in all tariff blocks are substantially below the total average cost of delivery of the service; and (2) there is only a moderate association between electricity consumption and household wealth.

KW - Electricity residential consumption

KW - Increasing block tariff

KW - Subsidy leakage

KW - Subsidy incidence

KW - Addis Ababa, Ethiopia

U2 - 10.1016/j.enpol.2019.01.033

DO - 10.1016/j.enpol.2019.01.033

M3 - Article

SP - 783

EP - 795

JO - Energy Policy

JF - Energy Policy

SN - 0301-4215

ER -