On the welfare effect of retail electricity subsidy in Vietnam

Purpose This research investigates how subsidy programs in Vietnam's residential electricity market affect consumers' well-being. Design/methodology/approach Two perspectives are employed: cash transfer and quantity-based subsidy. The effectiveness of is measured three ways: benefit incidence, beneficiary incidence materiality. established under the increasing block rate pricing, with first two rates being lower than marginal cost. To improve subsidy, examines consumer surplus four proposals. Findings results show that both types subsidies ineffective supporting poor. Research limitations/implications In order to achieve a more equal distribution among households, program should remove all subsidized blocks reflect full Changes be made price structure regarding intervals. Practical implications mitigate impact government by reducing extortion improving targeting efficiency, especially for poor households living rented houses. Originality/value paper discuss welfare effect Vietnam. First, it comprehensively evaluates Second, suggests modification tariff.