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Addressing self-disconnection among prepayment energy consumers: A behavioural approach

Author

Listed:
  • Marta Rocha

    (Nova School of Business and Economics, Universidade Nova de Lisboa Portugal)

  • Michelle Baddeley

    (Bartlett School of Construction and Project Management, University College London)

  • Michael G. Pollitt

    (JudgeBusiness School and Electricity Policy Research Group, University of Cambridge)

Abstract

This paper explores links between self-control in decision-making and self-disconnection by households using energy prepayment meters. Self-disconnection happens when households exhaust all available credit in their meter and are left without a supply of energy because they have been unable to top up. This has serious consequences for the well-being of households and also increases firms' costs. We explore behavioural characteristics associated with self-disconnection and present saving plans to help households minimise self-disconnection. We show that, in our sample, stated self-disconnection is positively associated with lower levels of goal achievement. We also show that households which have already experienced self-disconnection are more likely to accept an energy savings plan. It is relevant and promising that these households tend to select saving plans most likely to minimise their likelihood of self-disconnection. Our findings give some useful insights for energy policy-making, both for policy-makers interested in alleviating energy poverty and for energy utilities keen to limit self-disconnection.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Marta Rocha & Michelle Baddeley & Michael G. Pollitt, 2013. "Addressing self-disconnection among prepayment energy consumers: A behavioural approach," Working Papers EPRG 1328, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
  • Handle: RePEc:enp:wpaper:eprg1328
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    References listed on IDEAS

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    Cited by:

    1. Michael G. Pollitt, 2016. "Electricity Network Charging for Flexibility," Working Papers EPRG 1623, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    2. Burlinson, Andrew & Giulietti, Monica & Law, Cherry & Liu, Hui-Hsuan, 2021. "Fuel poverty and financial distress," Energy Economics, Elsevier, vol. 102(C).
    3. Bergmann, Ariel & Burton, Bruce & Klaes, Matthias, 2021. "European perceptions on crowdfunding for renewables: Positivity and pragmatism," Ecological Economics, Elsevier, vol. 179(C).
    4. Oseni, Musiliu O., 2015. "Assessing the consumers’ willingness to adopt a prepayment metering system in Nigeria," Energy Policy, Elsevier, vol. 86(C), pages 154-165.
    5. Werthschulte, Madeline, 2023. "Present focus and billing systems: Testing ‘pay-as-you-go’ vs. ‘pay-later’," Journal of Economic Behavior & Organization, Elsevier, vol. 212(C), pages 108-121.

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    More about this item

    Keywords

    Commitment contract; Self-control; Prepayment meter; Self-disconnection; Reminder;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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