Georgia's poor will pay more for electricity, but economic growth will cover it

Georgia plans to raise electricity prices for its citizens. It turns out that most households cannot easily cut back on electricity use when prices go up. The government believes economic growth will make up for the higher bills, especially for poorer households.

Governments often subsidize electricity to keep it affordable, especially for low-income households. But these subsidies often end up benefiting wealthier people more. This paper shows that raising electricity prices in Georgia will not hurt the poor as much as expected, because the economy is growing fast enough to offset the cost. This means governments can raise prices to cover costs without causing widespread hardship, as long as the economy keeps growing.