Evaluating Causal Effects of Increasing Block Pricing Policy on Residential Electricity Consumption in China

Using two waves of the China Family Panel Studies (CFPS), a nationally representative longitudinal household-level survey, this paper investigates how residential electricity consumption is affected by the increasing block pricing (IBP) policy nationwide. The results from the difference-in-differences approach suggest that the IBP policy is effective in reducing households' electricity consumption, and the reduction size is about 43 and 120 kWh for households affected by the second and third block pricing, respectively. Compared to rural households, urban households are found to be less impacted by the IBP policy. Besides, there are heterogeneous effects across various income groups, though the trend of the treatment effects is inconsistent. The findings are proved to be robust to different study samples and different model specifications.