Determinants of public acceptance of tiered electricity price reform in China: Evidence from four urban cities

Tiered electricity price (TEP) reform is a planning policy for household electricity conservation in China. Based on TEP, several price hierarchies are provided, and additional payment will be charged if the electricity consumptions exceed the upper bound of each hierarchy. Yet, the optimal level of each price tier and the institutions for implementing TEP need further research, which are set on the basis of considering residents' affordability and willingness to pay. Therefore, this paper aims at exploring determinants of public willingness to accept TEP and finding out the acceptable range of premium. A questionnaire survey in four urban cities of China is conducted to collect data, and an ordinary regression model is adopted in our analysis to identify the drivers and barriers to general public's acceptance of TEP. The results show that middle income earners are the groups that are mostly opposed to TEP. Rather than just focusing on economic factors, public environmental awareness should be highlighted during the implementation of TEP, because cost is not a statistically significant determinant in this study. Moreover, the public acceptable rate of premium of TEP in the urban cities, according to our research results, may be below .05 RMB/kW h. (C) 2011 Elsevier Ltd. All rights reserved.