Consumer's perception towards electricity theft: A case study of Islamabad and Rawalpindi using a path analysis

Electricity theft is a chronic issue and energy worth billions of dollars is stolen annually from electricity grids mainly in the developing countries. This study highlights socio-economic and institutional factors deteriorating the electricity theft situation using the path analysis by employing a measurement model in the analysis of a moment structures (AMOS). Preceding the path analysis, statistical package for social sciences (SPSS) is used for descriptive statistics, reliability analysis through Cronbach's alpha test, and exploratory factor analysis through KMO & Barlett's test of sphericity. The study analyses the factors that facilitate the illegal consumption of electricity in the service area of Islamabad Electric Supply Company, Pakistan, utilizing a primary dataset collected through a structured questionnaire from the twin cities of Islamabad and Rawalpindi. The analysis is based on perception of the consumers. The factors that significantly and positively affect the behavior towards theft include corruption diluting deterrence and power outages/load shedding, whereas the age of the respondent negatively affects their perception towards electricity theft. The role of electricity tariff rate, electricity consumption pattern, probability of detection, the rule of law, education of the respondent and quality of conduct of utility officials appeared insignificant in motivating consumers to steal electricity. •Electricity theft has been a major source of electricity shortage and increases in circular debt for the past few decades.•The determinants of electricity theft were identified by employing reliability analysis, exploratory factor analysis and path analysis.•The study shows a significant relationship between electricity theft and corruption diluting deterrence, power outages, and age.