Energy consumption behaviour in developing countries

Professor Asad Islam

A/Prof Liang Choon Wang 

Researchers: Professor Asad Islam and Associate Professor Liang Choon Wang

The team’s research in energy economics focuses on using randomized controlled experiments (RCEs) to study residential consumers’ behaviours in developing countries.

They recently completed a large-scale RCE in Bangladesh, in which they tested the relative effectiveness of norms and knowledge in influencing households’ electricity consumption.

Prof Islam and A/Prof Wang conducted the RCE in the Bangladeshi cities of Dhaka, Khulna, and Jessore, among 2300 households over 18 months in 2017-18. The work was done in collaboration with the Islamic Practice & Dawah Circle (IPDC) Bangladesh with support from the Dhaka Electricity Supply Authority (DESA).

In another project, they (jointly with Dr Jun Sung Kim from Kyung Hee University Korea) estimated residential electricity demand and associated price elasticity (how cost affects consumer demand) using a natural experiment which took advantage of sudden, unexpected changes in electricity retail prices in Bangladesh, and primary data collected from their research project.

The results have important policy implications for developing countries aiming to address major energy problems by implementing tariff reforms, with full project findings now published in the journal Energy Economics.

They are currently working on combining a natural experiment and a randomized controlled trial (RCT) in Sri Lanka and Bangladesh to examine: (1) the effects of introducing a prepaid electricity meter on residential electricity consumption; and (2) the potential unintended consequences of such a prepayment system on quality of life.

This will be large-scale research to establish evidence that prepaid metering would change energy access and quality of life for energy-poor households. It is hoped a prepaid system will trigger behavioural change by encouraging consumers in developing countries to reduce and conserve their energy usage.

Prof Islam is the director of the Centre for Development Economics and Sustainability (CDES) and a professor of economics at Monash Business School. He is also an affiliated Professor at Abdul Latif Jameel Poverty Action Lab (J-PAL), Massachusetts Institute of Technology (MIT), adjunct fellow at the BRAC Institute of Governance and Development (BIGD) in Bangladesh.

His recent research focuses on energy, social networks, education and health, gender, and technology adoption in Bangladesh, India, Indonesia, Uganda, Tanzania, and Cambodia.

He is currently collaborating with leading NGOs, economists and public health researchers to address emerging challenges associated with the COVID-19 pandemic.

Prof Islam has been published extensively in leading economics journals, and his work is supported by international grants, such as Australian Research council (ARC), UK Research Council (ESRC), DFID, AusAID (DFAT), the International Growth Centre (IGC), the European Commission and The World Bank.

A / Prof Wang is an associate professor of economics at Monash Business School. He is interested in a wide range of topics in the areas of behavioural economics, the economics of education, labour economics, development economics, public economics, and health economics. He often uses field or natural experiments as well as observational data to study the determinants of the education, health, and labour market outcomes of individuals in both developed and developing countries.

He has also published in a wide range of international refereed journals.