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Effects of Consumer Subsidy on Household Fuel Switching from Coal to Cleaner Fuels: A Case Study for Anthracites in Korea

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Hojeong Park, Hyucksoo Kwon
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This paper identifies factors that influence households' decisions to switch fuels. Using 2007 census data on briquette-consuming households, the study found that a coupon program provides an adverse effect to switching fuels to cleaner energy, while the disutility of briquettes is positively associated with the probability of fuel switching. However, the empirical finding suggests that the policy alone attempting to remove coupon programs may fail to switch fuels unless the cost of boiler changes is substantially reduced through the provision of accessible networks to alternative energy sources. The paper indicates that reform policy for consumer subsidy must be understood in line with more comprehensive regional energy plans to resolve energy poverty issues.