Prepayment and electricity usage in temperature extremes: Implications for energy poverty and climate justice
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PhD Seminar (Econ)
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Prepayment systems, though benefiting utilities’ revenue recovery, could impose additional burdens on disadvantaged households. This paper provides novel evidence on how prepaid metering affects households’ electricity-temperature relationships. Leveraging a novel dataset on 150,000 customers billing records in Bangladesh, the study finds that households’ electricity consumption becomes remarkably less responsive to temperature after they are enrolled in prepayment systems. Larger effects are documented among households with lower wealth or education levels. Prepaid house- holds tend to engage in mental accounting on their electricity consumption especially during hot seasons. The results implies that prepaid metering might have unintended impact on energy poverty and climate justice.
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