### **Box 5: Ethnographic Interview III**

### **General information about the household**

There are eight members in the respondent’s household. They live in a semi‐structured house in a village. The respondent‘s husband works at a hotel, while she manages the household. They have six children, and all of them are school age. The household shares an electricity connection with relatives, and the monthly bill is divided equally.

### **Expenditures on energy sources**

The household spends Rs. 300 to 700 per month on electricity and Rs. 200 to 300 each month on alternative energy sources such as candles. The family collects its electricity bills from the local village mosque, and the men pay the bills. The respondent tries her best to pay the bills on time given the bill is shared with her relatives. If there are any delays in payment, her relatives pressure her and this leads to tension.

### **Coping mechanisms**

The respondent generally pays her bill on time. There was only one time when she had to take a Rs. 300 loan from her sister to pay her bill. However, her husband is sick, and even small bills are difficult to afford. Any increase in cost of electricity would affect the monthly budget. It is not easy for her to send her children to school since the family struggles to afford food.

### **Social assistance**

The respondent’s family has received Rs. 1,500 monthly from BISP for the last three years, and this has been very useful in helping her afford her electricity costs. Her household uses the BISP cash mainly for food and the children‘s education. She has also managed to put aside some money for emergencies.

### **Attitudes toward energy reforms**

The respondent stated that she does not have sufficient knowledge regarding the reforms in the energy sector. In her opinion, the government is responsible for making such decisions. However, she was aware that the price of electricity had been increasing.

Participants perceive future price increases as unjustified without improvements in service reliability and quality. Most of the respondents—in particular, BISP beneficiaries and _katchi abadi_ residents—mentioned that they could not bear further increases in electricity tariffs. Upon further probing, interviewees agreed that price increases would be acceptable only if bills are made credible, load shedding is reduced and governance issues are addressed. However, the majority of households voiced their skepticism during the discussions as they doubt that such improvements will ever happen. This contrasts with findings from the SDPI study, in which 63 percent of respondents indicated that they would be willing to accept a Rs. 100‐500 increase in their utility bills if they were provided 24 hours of uninterrupted service. When asked whether they would be willing to pay an increase greater than Rs. 500, only 19 percent of respondents agreed. SDPI reported that all respondents would accept an increase in electricity charges if it was guaranteed that there would be no load shedding in the future (SDPI, 2014).

# **V. Policy Recommendations**

## **Moving beyond general price subsidies**

As we have demonstrated throughout this paper, the existing price‐based subsidy fails to protect low and middle‐income households from high electricity costs while disproportionately benefiting rich households. Price‐based subsidies will only favor the poor 17