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• We estimate the energy efficiency and direct rebound effect of residential electricity consumption by using the stochastic energy demand frontier model. • The average value of efficiency is 0.491, and the average rebound effect is 48%. • We find that electricity price and household size have a negative impact on the rebound effect, while the impact of income is inverted U-shaped. • The rebound effect varies across before and after the implementation of the increasing block pricing policy, considering rural and urban residents and different regions. The rebound effect is a potential threat to energy efficiency related policies to save energy. Based on data from China family panel studies over the period 2010–2018, this paper measures the energy efficiency and direct rebound effect of residential electricity consumption by using the stochastic energy demand frontier model. The result shows that the average value of efficiency is 0.491, and the average rebound effect is 48%. It means that there is still room for improvement in China's household electricity consumption efficiency. But the expected electricity- saving after improving efficiency can only achieve 52%. Besides, we find that electricity price and household size have a negative impact on the rebound effect, while the impact of income is inverted U-shaped. Finally, the rebound effect varies between before and after the implementation of the increasing block pricing policy, considering rural and urban residents and different regions. These findings provide some policy implications for the residential electricity pricing system under the background of energy conservation and climate change. [ABSTRACT FROM AUTHOR]