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Field
Abstract
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Before
Our study tests how prices and the availability of outside options like off-grid solar alter theft decisions in rural Pakistan. We begin by documenting Pakistan’s highly sophisticated electricity theft landscape. Despite growing government enforcement efforts, households in many areas still steal liberally. They demonstrate complex evasive behaviours such as running assets on different meters, bunching at key tariff thresholds while using illegal lines for excess consumption, or frequently switching between solar and illegal
consumption. The experiment explores these dynamics directly by introducing block-by-block subsidies to measure the price elasticities of demand and theft (unpaid bills and illegal connections). The introduction of block-by-block subsidies enables for more accurate estimation of demand elasticities compared to prevailing estimates that ignore the non-linear tariff structure. We also estimate a novel elasticity of electricity theft with respect to the price. By introducing subsidies, we change the set of relative prices between grid, solar, and illegal connections, enabling us to study the substitution dynamics between these competing technologies for accessing electricity. This study is a product of sustained collaboration with the Government of Pakistan over the past four years. They remain the primary stakeholder and facilitator of this research.
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After
Our study tests how prices and the availability of outside options like off-grid solar alter theft decisions in rural Pakistan. We begin by documenting Pakistan’s highly sophisticated electricity theft landscape. Despite growing government enforcement efforts, households in many areas still steal liberally. They demonstrate complex evasive behaviours such as running assets on different meters, bunching at key tariff thresholds while using illegal lines for excess consumption, or frequently switching between solar and illegal consumption. The experiment explores these dynamics directly by introducing block-by-block subsidies to measure the price elasticities of demand and theft (unpaid bills and illegal connections). The introduction of block-by-block subsidies enables for more accurate estimation of demand elasticities compared to prevailing estimates that ignore the non-linear tariff structure. We also estimate a novel elasticity of electricity theft with respect to the price. By introducing subsidies, we change the set of relative prices between grid, solar, and illegal connections, enabling us to study the substitution dynamics between these competing technologies for accessing electricity. This study is a product of sustained collaboration with the Government of Pakistan over the past four years. They remain the primary stakeholder and facilitator of this research.
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