Econometric Analysis of the Impact of Energy Subsidy Policies on Household Consumption Patterns in Indonesia

Abstract

This study aims to analyze the impact of energy subsidy policies on household
consumption patterns in Indonesia. Energy subsidies, which are provided to
ease the economic burden on households, have a significant influence on
energy consumption, especially in increasing household energy use. This
study employs a qualitative method, incorporating in-depth interviews,
questionnaires, and observations of households that receive energy subsidies.
The results show that households that receive subsidies tend to consume more
energy, albeit at a more affordable cost. The untargeted distribution of
subsidies results in energy waste, as some wealthy households continue to
receive subsidies. Although subsidies provide social benefits, their impact on
energy consumption behavior shows the need for educational programs on
energy efficiency and improved subsidy distribution mechanisms. The study
also found that energy subsidy policies should be balanced with more
sustainable policies, such as the use of renewable energy and incentives for
energy efficiency. The practical implication of this study is the importance of
evaluating energy subsidy policies to be more targeted and supported by
educational programs that can increase public awareness of efficient energy
use.