Self-Disconnection Among Pre-Payment Customers - A Behavioural Analysis
AbstractIn this paper, we revisit the problem of self-disconnection among prepayment energy customers. Using metering data from 2.3 million electricity pre-payment customers, we study how often households with an electricity pre-payment meter tend to self-disconnect over the course of a year - and why they do so. What we find is that, in any given year, the majority of households (ca. 78%) do not self-disconnect; ca. 12% self-disconnect once; ca. 3% selfdisconnect more often than four times. We also find that most selfdisconnections (ca. 62%) last for less than one day; between 72% and 82% last for less than two days; 12%-18% last for more than 3 days. As for the main driver of self-disconnection, we identify financial constraints. This suggests that it is likely to be difficult/expensive to reduce the total number of self-disconnections. In the last part of the paper, we argue, however, that it may (still) be possible to reduce the negative impact of self-disconnection in a relatively inexpensive way - at least to some extent - by helping households to better smooth their self disconnections over the course of a year.
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Bibliographic InfoPaper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 1214.
Date of creation: 21 Mar 2012
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Pre-payment; Self-Disconnection; Commitment Device; Self Control; Fuel Poverty;
Find related papers by JEL classification:
- D03 - Microeconomics - - General - - - Behavioral Microeconomics; Underlying Principles
- D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
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