IDEAS home Printed from https://ideas.repec.org/p/cge/wacage/727.html
   My bibliography  Save this paper

The impact of the energy price crisis on GB consumers: a difference-in-difference experiment

Author

Listed:
  • Burlinson, Andrew

    (School of Economics and Sheffield Urban International Trade and Environmental Economic Group, University of Sheffield)

  • Giulietti, Monica

    (Nottingham University Business School, University of Nottingham and UK Energy Research Centre)

  • Waterson, Michael

    (CAGE research centre and Department of Economics, University of Warwick)

  • Ajayi, Victor

    (Energy Policy Research Centre, University of Cambridge)

Abstract

Two exogenous events, coupled with substantial data on individual household electricity and gas usage, enable us to examine detailed consumption effects of recent rises in gas and electricity prices in Britain resulting from the Russia-Ukraine conflict. We isolate two samples of consumers with similar characteristics, all initially on fixed price contracts. One group, forcibly moved to variable prices, suffered the price shock, the others remained on fixed prices. Our diff-in-diff framework captures the impacts on the former group, finding significant consumption effects, particularly regarding gas usage. Differing effects across richer and poorer households are revealed, the poorest greatly reducing consumption.

Suggested Citation

  • Burlinson, Andrew & Giulietti, Monica & Waterson, Michael & Ajayi, Victor, 2024. "The impact of the energy price crisis on GB consumers: a difference-in-difference experiment," CAGE Online Working Paper Series 727, Competitive Advantage in the Global Economy (CAGE).
    • Handle: RePEc:cge:wacage:727
    as

    Download full text from publisher

    File URL: https://warwick.ac.uk/fac/soc/economics/research/centres/cage/manage/publications/wp727.2024.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Fetzer, Thiemo & Gazze, Ludovica & Bishop, Meena, 2022. "How large is the energy savings potential in the UK?," The Warwick Economics Research Paper Series (TWERPS) 1437, University of Warwick, Department of Economics.
    2. Beltrami, Filippo & Burlinson, Andrew & Giulietti, Monica & Grossi, Luigi & Rowley, Paul & Wilson, Grant, 2020. "Where did the time (series) go? Estimation of marginal emission factors with autoregressive components," Energy Economics, Elsevier, vol. 91(C).
    3. Fetzer, Thiemo, 2023. "Did the policy response to the energy crisis cause crime? Evidence from England," CAGE Online Working Paper Series 662, Competitive Advantage in the Global Economy (CAGE).
    4. Druckman, A. & Jackson, T., 2008. "Household energy consumption in the UK: A highly geographically and socio-economically disaggregated model," Energy Policy, Elsevier, vol. 36(8), pages 3167-3182, August.
    5. Ellen Webborn & Jessica Few & Eoghan McKenna & Simon Elam & Martin Pullinger & Ben Anderson & David Shipworth & Tadj Oreszczyn, 2021. "The SERL Observatory Dataset: Longitudinal Smart Meter Electricity and Gas Data, Survey, EPC and Climate Data for over 13,000 Households in Great Britain," Energies, MDPI, vol. 14(21), pages 1-37, October.
    6. Braakmann, Nils & Dursun, Bahadir & Pickard, Harry, 2023. "Energy Price Shocks and the Demand for Energy-Efficient Housing: Evidence from Russia's Invasion of Ukraine," IZA Discussion Papers 15959, Institute of Labor Economics (IZA).
    7. Marc F. Bellemare & Casey J. Wichman, 2020. "Elasticities and the Inverse Hyperbolic Sine Transformation," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 82(1), pages 50-61, February.
    8. Baker, Paul & Blundell, Richard & Micklewright, John, 1989. "Modelling Household Energy Expenditures Using Micro-data," Economic Journal, Royal Economic Society, vol. 99(397), pages 720-738, September.
    9. Fuerst, Franz & McAllister, Patrick & Nanda, Anupam & Wyatt, Peter, 2015. "Does energy efficiency matter to home-buyers? An investigation of EPC ratings and transaction prices in England," Energy Economics, Elsevier, vol. 48(C), pages 145-156.
    10. Peter C. Reiss & Matthew W. White, 2005. "Household Electricity Demand, Revisited," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 72(3), pages 853-883.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Meier, Helena & Rehdanz, Katrin, 2010. "Determinants of residential space heating expenditures in Great Britain," Energy Economics, Elsevier, vol. 32(5), pages 949-959, September.
    2. Büchs, Milena & Schnepf, Sylke V., 2013. "Who emits most? Associations between socio-economic factors and UK households' home energy, transport, indirect and total CO2 emissions," Ecological Economics, Elsevier, vol. 90(C), pages 114-123.
    3. Braakmann, Nils & Dursun, Bahadir & Pickard, Harry, 2023. "Energy Price Shocks and the Demand for Energy-Efficient Housing: Evidence from Russia's Invasion of Ukraine," IZA Discussion Papers 15959, Institute of Labor Economics (IZA).
    4. Fetzer, Thiemo & Palmou, Christina & Schneebacher, Jakob, 2024. "How do firms cope with economic shocks in real time?," The Warwick Economics Research Paper Series (TWERPS) 1517, University of Warwick, Department of Economics.
    5. Hache, Emmanuel & Leboullenger, Déborah & Mignon, Valérie, 2017. "Beyond average energy consumption in the French residential housing market: A household classification approach," Energy Policy, Elsevier, vol. 107(C), pages 82-95.
    6. Valenzuela, Carlos & Valencia, Alelhie & White, Steve & Jordan, Jeffrey A. & Cano, Stephanie & Keating, Jerome & Nagorski, John & Potter, Lloyd B., 2014. "An analysis of monthly household energy consumption among single-family residences in Texas, 2010," Energy Policy, Elsevier, vol. 69(C), pages 263-272.
    7. Tilov, Ivan & Farsi, Mehdi & Volland, Benjamin, 2019. "Interactions in Swiss households’ energy demand: A holistic approach," Energy Policy, Elsevier, vol. 128(C), pages 136-149.
    8. Ana-María Martínez-Llorens & Paloma Taltavull de La Paz & Raul-Tomas Mora-Garcia, 2020. "Effect of The Physical Characteristics of a Dwelling on Energy Consumption and Emissions: The Case of Castellón And Valencia (Spain)," Sustainability, MDPI, vol. 12(22), pages 1-20, November.
    9. Koji Miyawaki & Yasuhiro Omori, 2007. "Duality-Based Analysis of Residential Gas Demand under Decreasing Block Rate Pricing," CIRJE F-Series CIRJE-F-506, CIRJE, Faculty of Economics, University of Tokyo.
    10. Manuel Frondel and Gerhard Kussel, 2019. "Switching on Electricity Demand Response: Evidence for German Households," The Energy Journal, International Association for Energy Economics, vol. 0(Number 5).
    11. Valeria Di Cosmo & Sean Lyons & Anne Nolan, 2014. "Estimating the Impact of Time-of-Use Pricing on Irish Electricity Demand," The Energy Journal, , vol. 35(2), pages 117-136, April.
    12. Fateh Belaid & Christophe Rault, 2020. "Energy Expenditure in Egypt: Empirical Evidence Based on A Quantile Regression Approach," Working Papers 1446, Economic Research Forum, revised 20 Dec 2020.
    13. Belaïd, Fateh & Garcia, Thomas, 2016. "Understanding the spectrum of residential energy-saving behaviours: French evidence using disaggregated data," Energy Economics, Elsevier, vol. 57(C), pages 204-214.
    14. Helena Meier & Tooraj Jamasb & Luis Orea, 2013. "Necessity or Luxury Good? Household Energy Spending and Income in Britain 1991-2007," The Energy Journal, , vol. 34(4), pages 109-128, October.
    15. Hilber, Christian A.L. & Palmer, Charles & Pinchbeck, Edward W., 2019. "The energy costs of historic preservation," Journal of Urban Economics, Elsevier, vol. 114(C).
    16. Dorothée CHARLIER & Mouez FODHA & Djamel KIRAT, 2021. "CO2 Emissions from the Residential Sector in Europe: Some Insights form a Country-Level Assessment," LEO Working Papers / DR LEO 2849, Orleans Economics Laboratory / Laboratoire d'Economie d'Orleans (LEO), University of Orleans.
    17. Bishwa Koirala & Alok Bohara & Hui Li, 2013. "Effects of energy-efficiency building codes in the energy savings and emissions of carbon dioxide," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 15(3), pages 271-290, July.
    18. Gassmann, Franziska, 2014. "Switching the lights off: The impact of energy tariff increases on households in the Kyrgyz Republic," Journal of Comparative Economics, Elsevier, vol. 42(3), pages 755-769.
    19. Wichman, Casey, 2024. "Efficiency, Equity, and Cost-Recovery Trade-Offs in Municipal Water Pricing," RFF Working Paper Series 24-18, Resources for the Future.
    20. Çetinkaya, Murat & Başaran, Alparslan A. & Bağdadioğlu, Necmiddin, 2015. "Electricity reform, tariff and household elasticity in Turkey," Utilities Policy, Elsevier, vol. 37(C), pages 79-85.

    More about this item

    Keywords

    Energy consumption; difference-in-differences; energy crisis; smart meters. JEL Classification: L94; E31; D12; I19;
    All these keywords.

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cge:wacage:727. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Jane Snape (email available below). General contact details of provider: https://edirc.repec.org/data/dewaruk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.