The Effect of Targeted Subsidy Implementation on Electricity Consumption Distribution Inequality in Semnan Province

The main goal of this research is to investigate the effect of performing targeted subsidy on energy consumption inequality concerning Semnan province in Iran.  Doing so, first the Gini coefficient of the household electricity consumption is calculated using households budget micro data concerning urban and rural household during the years of 1984(1363)-2014(1393). Then, the effect of performing the targeted subsidy on Gini coefficient has been estimated using pooled data linear regression model. The results indicate that, performing targeted subsidy has increasing effect on electricity consumption inequality. Performance the policy of targeted subsidies (leaving the price control relatively) has increased the inequality in electricity consumption of the households. The lower income groups consuming less electricity when the prices are more close to real price. According the results, applying the price policies as well as non-price policy will modify the electricity consumption pattern.