Electricity reform, tariff and household elasticity in Turkey

This paper assesses the progress of Turkish electricity reform with a particular emphasis upon tariff structure and elasticity which are essential components of a successful reform. This is done through estimating price and income elasticity using the pooled data approach for the first time for the Turkish households covering the period of 2003–2012. The results strongly suggest that both the sector regulator EMRA and the private distribution companies ought to take into consideration the households' characteristics while designing electricity tariff following the envisaged introduction of cost-based tariff after 2015.