Residential Consumer Understanding of Electricity Bills

Abstract

The neoclassical model of economics assumes that greater the information available, the easier it is for a consumer to make decisions. In the context of electricity usage, overwhelming amounts of information presented on energy bills and a lack of real-time information deter consumers from understanding their own energy usage and developing personalized strategies to reduce it. This study assesses the literacy levels regarding electricity bills amongst consumers in India. Regression results indicate that homes with stronger beliefs in energy conservation minimize their usage. The size of the dwelling,demographics, and the ownership of the dwelling influence literacy levels regarding electricity bills. The study had a counterintuitive finding, as the respondents were found reluctant to receive a normative comparison of their electricity bills—strange for a collectivistic cultured society like India. The study recommends making electricity bills more visually appealing and increasing their frequency to increase awareness of energy usage.