Journal of Economic Research (Tahghighat- E- Eghtesadi)

Journal of Economic Research (Tahghighat- E- Eghtesadi)

The dynamic effects of the Law on Removing Obstacles for Power Industry Development on Iranian household electricity consumption: With an Emphasis on The Role of Inflation

Articles in Press

Document Type : Research Paper

Authors
Leyla Jabari 1
Ali Asghar Salem 2
Younes Nademi 3
Abbas Shakeri 4
1 Department of Theoretical Economics , Faculty of Economics, Allameh Tabatabae'i University, Tehran, Iran.
2 Department of Theoretical Economics , Faculty of Economics, Allameh Tabataba'i University
3 Department of Economics, , Faculty of Humanities, Ayatollah Boroujerdi University, Boroujerd, Iran.
4 Department of Theoretical Economics, Faculty of Economics, Allameh Tabatabae'i University, Tehran, Iran.
10.22059/jte.2026.404330.1009037
Abstract
The increase in household electricity consumption and the imbalance between electricity supply and demand represent one of Iran’s most critical energy challenges. In response, the government implemented the Removing Obstacles for Power Industry Development to control electricity consumption and encourage high-consuming households to save energy. However, the effect of this law on electricity consumption hasnot yet been examined. Therefore, this study aims to investigate the dynamic effects of the law on household electricity consumption and the moderating role of inflation. The novelty of the research lies in analyzing the law’s dynamic impacts and isolating the influence of inflation on the outcomes. The results indicate that the law has a significant negative effect on electricity consumption: the law’s coefficient is negative and significant in both the first and second years after implementation, although smaller in the second year. Moreover, the interaction term between inflation and the law is positive and significant. In other words, the law has a deterrent effect on electricity consumption, but its impact diminishes over time and under inflationary conditions. Therefore, it is recommended that pricing reforms be implemented gradually and alongside inflation control policies to ensure sustainable electricity savings.
Keywords
Difference-in-Differences
Inflation
Electricity Tariffs
Households Electricity Consumption
Consumption
Subjects
Journal of Economic Research (Tahghighat- E- Eghtesadi)

Articles in Press, Accepted Manuscript
Available Online from 19 September 2026

  • Receive Date 15 October 2025
  • Revise Date 14 September 2026
  • Accept Date 19 September 2026