The Analysis of Household Electricity Demand for Small Scaled Household in Medan

1 Pages Posted: 12 Jun 2011

See all articles by Tongam Sihol Nababan

Tongam Sihol Nababan

University of HKBP Nommensen, Faculty of Economics

Date Written: December 19, 2008

Abstract

The research aimed to analyze the variables affecting the household electricity energy demand for strata of tariff structure 450 VA, 900 VA, and 1300 VA, as classified by PT. PLN (Persero). The research was carried out in Medan City, North Sumatra.

The model was specified in single equation with endogeneous variables : the household electricity energy demand, and the exogeneous variables: consumer’s income, price of electricity with the proxy of willingness to pay per KWh (kilowatt-hours), home appliances index, number of household members, number of rooms, price of other goods (fuel and gas) as a substitution goods for electricity, and etnic.

The result of the research showed that generally for strata : 450 VA, 900VA, and 1300 VA, the variables significantly influencing the household electricity energy demand were consumer’s income and WTP per KWh. Meanwhile, other variables had the various significance for every stratum. The variable of home appliances index positively and significantly influenced the household electricity energy demand for strata 900 VA and 1300 VA, but it was not significant for stratum 450 VA. This was caused by the limitation of using the home appliances. The variables of number of household members and number of rooms were positively and significantly influenced the household electricity energy demand for strata 450 VA and 900 VA. The variable of price of fuel was only significant for stratum 1300 VA.

The research indicated that consumers of household in Medan City can improved the utility of electricity usage through the usage of more appliances but it was constrained by the power of electricity supplied by PT. PLN. Thus, PT. PLN should improve its management especially in electric power station.

Keywords: electricity, demand, household, appliance, willingness to pay (WTP)

Suggested Citation

Nababan, Tongam Sihol, The Analysis of Household Electricity Demand for Small Scaled Household in Medan (December 19, 2008). Available at SSRN: https://ssrn.com/abstract=1844297 or http://dx.doi.org/10.2139/ssrn.1844297

Tongam Sihol Nababan (Contact Author)

University of HKBP Nommensen, Faculty of Economics ( email )

Jln. Sutomo No. 4A
Medan, North Sumatra 20118
Indonesia
08126411543 (Phone)

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