Pricing behaviour under competition in the UK electricity supply industry

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Pricing behaviour under competition in the UK electricity supply industry

Author Info

Giulietti, Monica (Aston Business School)
Otero, Jesus (Universidad del Rosario, Colombia)
Waterson, Michael (University of Warwick)

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Abstract

This paper investigates the evolution of electricity prices for domestic customers in the UK following the introduction of competition. The empirical analysis is based on a panel data set containing detailed information about electricity supply prices over the period 1999 to 2006. The analysis aims to test theoretical hypotheses about the nature of consumers’ switching and search costs. The econometric analysis of persistence and price dispersion provides only limited support for the view that the market is becoming more competitive and also indicates that there remain significant potential benefits to consumers from searching alternative suppliers.

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Publisher Info
Paper provided by University of Warwick, Department of Economics in its series The Warwick Economics Research Paper Series (TWERPS) with number 790.

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Length: 30 pages
Date of creation: 2007
Date of revision:
Handle: RePEc:wrk:warwec:790

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Find related papers by JEL classification:
L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions
C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data

This paper has been announced in the following NEP Reports:

NEP-ALL-2007-04-09 (All new papers)
NEP-COM-2007-04-09 (Industrial Competition)
NEP-ENE-2007-04-09 (Energy Economics)
NEP-IND-2007-04-09 (Industrial Organization)
NEP-MIC-2007-04-09 (Microeconomics)

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