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Switching Energy Suppliers: It’s Not All About the Money

Author

Listed:
  • David Deller
  • Monica Giulietti
  • Graham Loomes
  • Catherine Waddams Price
  • Anna Moniche
  • Joo Young Jeon

Abstract

Many consumers do not take advantage of lower energy prices available in liberalized retail markets. We provide evidence to explain why consumers may leave substantial amounts of “money on the table†in this way. We observe real decisions made by over 7,000 consumers in a collective switching auction, supplemented by their responses to a survey. We identify factors which may inhibit switching and show that expectations of high switching rates in an unregulated market may be unrealistic. Our findings have important implications for the design and regulation of energy markets, including imposition of price caps on “default†retail tariffs in 2019 in the UK and parts of Australia.

Suggested Citation

  • David Deller & Monica Giulietti & Graham Loomes & Catherine Waddams Price & Anna Moniche & Joo Young Jeon, 2021. "Switching Energy Suppliers: It’s Not All About the Money," The Energy Journal, , vol. 42(3), pages 1-26, May.
    • Handle: RePEc:sae:enejou:v:42:y:2021:i:3:p:1-26
    DOI: 10.5547/01956574.42.3.ddel
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    References listed on IDEAS

    as
    1. Wilson, Chris M., 2012. "Market frictions: A unified model of search costs and switching costs," European Economic Review, Elsevier, vol. 56(6), pages 1070-1086.
    2. repec:aen:journl:ej39-4-waddams is not listed on IDEAS
    3. repec:aen:journl:ej38-6-xiaoping is not listed on IDEAS
    4. Waddams Price, Catherine & Bennett, Matthew, 1999. "New gas in old pipes: opening the UK residential gas market to competition," Utilities Policy, Elsevier, vol. 8(1), pages 1-15, March.
    5. Monica Giulietti & Jesus Otero & Michael Waterson, 2010. "Pricing behaviour under competition in the UK electricity supply industry," Oxford Economic Papers, Oxford University Press, vol. 62(3), pages 478-503, July.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Guo, Yiang & Olmstead, Derek E.H. & Wilkins, Andrew H., 2025. "What drives consumers to switch retailers? Evidence from the Alberta electricity market," Energy Policy, Elsevier, vol. 206(C).
    2. Helferich, Marvin & Tröger, Josephine & Stephan, Annegret & Preuß, Sabine & Pelka, Sabine & Stute, Judith & Plötz, Patrick, 2024. "Tariff option preferences for smart and bidirectional charging: Evidence from battery electric vehicle users in Germany," Energy Policy, Elsevier, vol. 192(C).
    3. Wang, Aijia & Mah, Daphne Ngar-yin, 2026. "A systematic review on varieties, effectiveness and determinants of consumer engagement in the context of electricity market reforms from a European-Asian comparative perspective," Renewable and Sustainable Energy Reviews, Elsevier, vol. 226(PD).

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