CLIMATE CHANGE AND HOUSEHOLD ELECTRICITY CONSUMPTION INEQUALITY IN CHINA

Abstract

Based on the micro-data of China’s Urban Household Survey, this paper investigates the impact of climate change on household electricity consumption inequality by using a two-way fixed effect model. The result reveals that households are more likely to purchase air conditioning (AC) and consume more electricity in response to extreme weather shocks. Furthermore, it is observed that high-income households are better equipped to mitigate the negative effects of extreme weather, as they possess a larger proportion of AC units and are more likely to acquire new ones to cope with extremely high temperatures. Finally, the study finds that extreme weather shocks exacerbate inequality in household electricity consumption.