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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

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    1. 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.
    2. Miguel Flores and Catherine Waddams Price, 2018. "The Role of Attitudes and Marketing in Consumer Behaviours in the British Retail Electricity Market," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4).
    3. 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.
    4. Xiaoping He & David Reiner, 2017. "Why Consumers Switch Energy Suppliers: The Role of Individual Attitudes," The Energy Journal, International Association for Energy Economics, vol. 0(Number 6).
    5. 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.
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    Cited by:

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