Sources of inequality in household electricity consumption: evidence from Taiwan

ABSTRACT

This study examined the inequality of household electricity consumption in Taiwan over 1981–2017. The concentration index results indicated that richer households consume more electricity use per capita than poorer households, while the Kakwani index results revealed that the regressivity of electricity expenditure with respect to income distribution gradually intensified. Household size, household income, and air conditioner ownership are the most important sources of the inequality in electricity use. The inequality in electricity use concentrated among the high-income households decreased due to the declining income elasticity, the pro-rich distribution of household size, and increasing prevalence of household appliances. The distribution of household size across the income groups had changed. These results imply that the electricity tariff structures should take household size into consideration. It is important to develop identification approaches, integrating information about the characteristics of households and their occupants, so as to support utilities identify and classify the clients.

KEYWORDS:

• Electricity consumption
• household characteristics
• inequality
• concentration index
• kakwani index

Acknowledgments

The author thanks the Ministry of Science and Technology, Taiwan, for providing funding support (MOST 107-2410-H-275-005 and MOST 108-2410-H-275-002) to this study.

Notes

¹ Some studies suggested that energy poverty would be associated with financial inclusion (Dogan, Madaleno, and Taskin 2021; Koomson and Danquah 2021). For the household data, financial inclusion can be measured by some variables, such as access to financial and insurance services, saving behavior, insurance ownership, the use of credit card, and online shopping. However, in this study, the variables about financial inclusion are not collected in the datasets. This study would not include the variable of financial inclusion in the model.