Price Demand Elasticity and Potential Saving of Electric Subsidies: Empirical Evidence of Household Socio-Economic Survey

Andri Yudhi Supriadi, Telisa Falianty

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

Abstract

The analysis of the potential saving of electric subsidies uses hypothetical assumptions about the removal of subsidies for some of a household with connections 900 VA. The National Socioeconomic Survey (SUSENAS) of March 2017 has been used to analyze the price demand elasticity and the potential saving of electric subsidies. Price demand elasticity was obtained using multiple regression model. The results show that households with an installed capacity of 900 VA are most affected by changes in electricity prices compared to other installed power households. However, the characteristics of the total expenditure are similar to non-subsidized households, namely household with an installed capacity of 1300 VA. Given that 95% of the installed 900 VA households are above the poverty line and still enjoy subsidies, the revocation of subsidies through tariff rationalization will save electricity subsidies of Rp. 29.25 trillion per year. Before the tariff rationalization is performed, the government should conduct field verification on households that receive subsidies to improve the effectiveness of the targeted subsidy policy.

Original languageEnglish
Title of host publication2019 International Conference on Technologies and Policies in Electric Power and Energy, TPEPE 2019
PublisherInstitute of Electrical and Electronics Engineers Inc.
ISBN (Electronic)9781728156927
DOIs
Publication statusPublished - Oct 2019
Event2019 International Conference on Technologies and Policies in Electric Power and Energy, TPEPE 2019 - Yogyakarta, Indonesia
Duration: 21 Oct 201922 Oct 2019

Publication series

Name2019 International Conference on Technologies and Policies in Electric Power and Energy, TPEPE 2019

Conference

Conference2019 International Conference on Technologies and Policies in Electric Power and Energy, TPEPE 2019
CountryIndonesia
CityYogyakarta
Period21/10/1922/10/19

Keywords

  • electricity subsidy
  • energy public policy
  • household electricity demand
  • I3
  • poverty Theme of conference: Energy Public Policy JEL Classification: D12

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