Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/308771 
Year of Publication: 
2024
Series/Report no.: 
Graduate Institute of International and Development Studies Working Paper No. HEIDWP22-2024
Publisher: 
Graduate Institute of International and Development Studies, Geneva
Abstract: 
The timing of payment can enhance salience, making customers more price-responsive when paying before consumption rather than after. This study examines Indonesia's nationwide switch to prepaid electricity metering, impacting over 40 million households. We find that prepaid metering users are twice as price-elastic as postpaid users. We also find a positive willingness to pay for prepaid metering, suggesting consumer welfare gains. As prices rise, prepaid metering reduces excess burden by 1.5% and CO2 emissions by nearly 6%. These findings suggest prepaid meters can support climate policy goals by promoting energy conservation without imposing significant burdens on consumers.
Subjects: 
electricity
prepayment
elasticity
salience
energy conservation
JEL: 
Q41
Q48
I30
Document Type: 
Working Paper

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