While energy tariff subsidies exist in various countries around the world, their real impacts are not yet fully understood. This study assesses the effects and efficiency of the Brazilian Social Electricity Tariff Program (TSEE), which provides discounts on electricity bills to low-income customers. Using a difference-in-differences methodology, we estimate the program's effect on energy consumption of the directly benefited population, using a regulatory change as an instrument of exogenous variation in electricity prices. We also discuss how this policy affects social welfare, considering the tariff pass-through of the subsidy to other consumers. With this work, we aim to contribute to the literature on energy subsidies, providing evidence from a developing country, and enrich the discussion on the intersection between efficiency and equity in energy policies.
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