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The impact of energy prices on consumers: a tale of two crises

Author

Listed:
  • Andrew Burlinson

    (School of Economics, University of Sheffield, Sheffield S10 2TU, UK)

  • Monica Giulietti

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

  • Michael Waterson

    (Department of Economics, University of Warwick, UK)

  • Victor Ajayi

    (Energy Policy Research Centre, University of Cambridge, UK)

Abstract

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

Suggested Citation

  • Andrew Burlinson & Monica Giulietti & Michael Waterson & Victor Ajayi, 2025. "The impact of energy prices on consumers: a tale of two crises," Working Papers 2025008, The University of Sheffield, Department of Economics.
    • Handle: RePEc:shf:wpaper:2025008
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    File URL: https://www.sheffield.ac.uk/economics/research/serps
    File Function: First version, July 2025
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    Keywords

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    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
    • I19 - Health, Education, and Welfare - - Health - - - Other

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