Subjective satisfaction and objective electricity poverty reduction in Vietnam, 2008–2018

Abstract

PurposeThe authors estimate the reduction of electricity poverty in Vietnam. The essential argument is that human development is about subjective feeling as much as technology and income.Design/methodology/approachThe authors use a self-reported satisfaction indicator as complementary to objective indicators based on national household surveys from 2008 to 2018.FindingsIn 2010, the fraction of households with access to electricity was over 96%. However, over 24% declared their electricity use did not meet their needs. Since 2014, the satisfaction rate is around 97%, even if 25% of the households used less than 50 kWh/month. Today there is electricity for all in Vietnam, but electricity bills weigh more and more in the budget of households.Practical implicationsThe subjective energy poverty measure allows better international statistics: unlike poverty or needs-based criteria, self-assessed satisfaction of needs compares across income levels and climates.Social implicationsInequalities in electricity use among Vietnamese households decreased during the 2008–2018 period, but are not greater than inequalities in income, contrary to the findings of Son and Yoon (2020).Originality/valueEngineering and econometric objectivist approaches dominate the literature on sustainability monitoring. Out of 232 sustainable development goal (SDG) indicators, only two are subjective. Yet the findings show that subjective indicators tell a different part of the story. Access is not grid building, but the meaningful provision of electricity to satisfy the needs.

Inequality in electricity consumption and economic growth: Evidence from a small area estimation study

“…Findings from our study suggest the provision of an electricity subsidy for low-income households, especially those in poor areas. The Vietnamese government has invested in the power sector for rural and mountainous areas since 2010; this has significantly improved the access to the electricity grid for a huge number of households [ 44 ]. Since 2011, the government of Vietnam has been providing cash subsidies for electricity consumption to poor households [ 45 ].…”

“…Since 2011, the government of Vietnam has been providing cash subsidies for electricity consumption to poor households [ 45 ]. The issue of energy poverty has been significantly reduced, and inequalities in electricity consumption also declined during the 2008–2018 period [ 44 ]. However, the energy cost has recently increased, becoming a growing burden for low-income households [ 46 ].…”

Energy Poverty and Health Expenditure: Empirical Evidence from Vietnam

“…Furthermore, the mere availability of electricity does not necessarily guarantee that households have the ability to afford its consumption. In Vietnam, a significant portion of households (25%) had insufficient electricity to meet their demands in 2010, according to Ha-Duong and Nguyen (2018). For electricity to substantially contribute to poverty alleviation, rural households must exceed the monthly subsidized electricity allocation of 50 kWh and consume electricity at higher levels (Scott and Greenhill 2014).…”

On the welfare effect of retail electricity subsidy in Vietnam

“…Despite the improvements in access and affordability, inequality in electricity consumption across households has become a concern. While households spend only 6% of their income on electricity bills, this rate has grown faster than income, which puts a great burden on poor households (Ha-Duong and Nguyen, 2021; Nguyen et al. , 2019).…”

“…(2019) and Son and Yoon (2020). The performance of the electricity sector and consumer satisfaction have also been intensively studied (Ha-Duong and Nguyen, 2017, 2021). Other papers investigated the electricity demand function, focusing on finding the appropriate instrument variables to overcome the endogeneity.…”