Increasing Electricity Tariffs and Consumer Choices: Exploring the Nexus in Pakistan

Abstract

The study examines whether rising electricity prices in Pakistan have led to changes in consumer behavior, focusing on both households and businesses. Electricity remains essential across all sectors, but steadily increasing costs have significantly influenced consumer habits and the infrastructure of power distribution companies. The research is based on primary data collected during January to April 2024 through a structured questionnaire from 1,180 respondents in ten major cities, selected via stratified random sampling, targeting socioeconomic classes A to E and ages 18-60. Data sets were analyzed using SPSS to uncover behavioral adjustments in response to price hikes. The findings highlight that while the intent of raising electricity prices was to boost revenue, it has strained consumers’ affordability, undermining this goal. The study recommends exploring alternative measures to ease the burden on consumers, including promoting renewable energy and involving distribution companies in policy decisions regarding additional taxes on the general public.