Revisiting the Effect of Urbanization on Residential Electricity Consumption

Abstract

Under the background of electrification, it is significant to explore the changes in residential electricity consumption for energy conservation and emission reduction. Based on the staggered difference-in-difference (DID) approach, this paper investigates urbanization's effect on residential electricity consumption using the longitudinal dataset from 2010-2018 China Family Panel Studies (CFPS). It is found that China's urbanization has increased the average electricity consumption by 12.8% with electricity substitution as the main channel. After urbanization, the scale effect of population and area levels does not exist. The authors also find that this positive effect is affected by electricity price (i.e., the higher the price level, the smaller the positive impact). However, as the electric charge is insignificant relative to the income, the moderating effect of price remains small. This indicates that the positive effect of urbanization will not decrease soon in the future unless the residential electricity price system is reformed.