Does awareness of environmental pollution increase electricity consumption? A view from household survey of China

Household electricity conservation is a non-negligible aspect of environmental pollution with growing importance for an eco-friendly economy and society. However, debates regarding household electricity consumption have placed more emphasis on the physical attributes of the dwellings, demographic characteristics and the socioeconomic behaviour of households; few studies have directly discussed the awareness of environmental pollution. Based on the `China Family Panel Studies' surveys with an extracted 8249 households in 25 provinces from 2014 to 2018, we analyse whether or not and to what extent the awareness of environmental pollution impacts household electricity consumption. The study finds that the awareness of environmental pollution rather than actual environmental pollution increases household electricity consumption. The finding is robust under various model specifications. Given a 1% increase in the awareness of environmental pollution, households living in southern China, located in eastern China or living in an urban area were found to have higher electricity consumption. To address possible estimation bias due to self-selection, we design a quasi-policy-shock variable to describe the severity of the perceived environmental pollution and run the propensity score matching regression (PSM). The finding still holds.