IDEAS home Printed from https://ideas.repec.org/a/sae/enejou/v42y2021i3p1-26.html
   My bibliography  Save this article

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
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.5547/01956574.42.3.ddel
    Download Restriction: no
    File URL: https://libkey.io/10.5547/01956574.42.3.ddel?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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).

    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. Xiaoping He & David Reiner, 2018. "Consumer Engagement in Energy Markets: The Role of Information and Knowledge," Working Papers EPRG 1835, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    2. de Bragança, Gabriel Godofredo Fiuza & Daglish, Toby, 2017. "Investing in vertical integration: electricity retail market participation," Energy Economics, Elsevier, vol. 67(C), pages 355-365.
    3. Wilson, Chris M, 2009. "Market Frictions: A Unified Model of Search and Switching Costs," MPRA Paper 13672, University Library of Munich, Germany.
    4. Daglish, Toby, 2015. "Consumer Governance in Electricity Markets," Working Paper Series 4183, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    5. Li, He & Fang, Debin & Zhao, Chaoyang, 2024. "Retail competition among multi-type retail electric providers in social networks," Energy Economics, Elsevier, vol. 132(C).
    6. Salies, Evens, 2005. "A Measure of Switching Costs in the GB Electricity Retail Market," MPRA Paper 28255, University Library of Munich, Germany, revised Apr 2007.
    7. Erdogan, Murside Rabia & Camgoz, Selin Metin & Karan, Mehmet Baha & Berument, M. Hakan, 2022. "The switching behavior of large-scale electricity consumers in The Turkish electricity retail market," Energy Policy, Elsevier, vol. 160(C).
    8. Simshauser, Paul, 2018. "Price discrimination and the modes of failure in deregulated retail electricity markets," Energy Economics, Elsevier, vol. 75(C), pages 54-70.
    9. Nogata, Daisuke, 2022. "Determinants of household switching between natural gas suppliers: Evidence from Japan," Utilities Policy, Elsevier, vol. 76(C).
    10. De Mel, S. & Munshi, K. & Reiche, S. & Sabourian, H., 2020. "Herding in Quality Assessment: An Application to Organ Transplantation," Cambridge Working Papers in Economics 2052, Faculty of Economics, University of Cambridge.
    11. Monica Giulietti & Michael Waterson & Matthijs Wildenbeest, 2014. "Estimation of Search Frictions in the British Electricity Market," Journal of Industrial Economics, Wiley Blackwell, vol. 62(4), pages 555-590, December.
    12. Ilona Lipowska & Marcin Lipowski & Dariusz Dudek & Radosław Mącik, 2024. "Switching Behavior in the Polish Energy Market—The Importance of Resistance to Change," Energies, MDPI, vol. 17(2), pages 1-14, January.
    13. Esplin, Ryan & Best, Rohan & Scranton, Jessica & Chai, Andreas, 2022. "Who pays the loyalty tax? The relationship between socioeconomic status and switching in Australia's retail electricity markets," Energy Policy, Elsevier, vol. 164(C).
    14. Shandelle Steadman & Anna Rita Bennato & Monica Giulietti, 2024. "Would You Like to Trade Your Energy? A Comparative Survey Experiment on Energy Trading Platforms," The Energy Journal, , vol. 45(3), pages 1-24, May.
    15. Andreas Ziegler, 2018. "Heterogeneous preferences and the individual change to alternative electricity contracts," MAGKS Papers on Economics 201827, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    16. Ariel Casarin, 2014. "Regulated price reforms and unregulated substitutes: the case of residential piped gas in Argentina," Journal of Regulatory Economics, Springer, vol. 45(1), pages 34-56, February.
    17. Ziegler, Andreas, 2020. "Heterogeneous preferences and the individual change to alternative electricity contracts," Energy Economics, Elsevier, vol. 91(C).
    18. Chris Wilson, 2009. "Market Frictions: A Unified Model of Search Costs and Switching Costs," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2009-03, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    19. Nils-Henrik M. von der Fehr & Petter Vegard Hansen, 2010. "Electricity Retailing in Norway," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 25-46.
    20. Xiaoping He & David Reiner, 2015. "Why Do More British Consumers Not Switch Energy Suppliers? The Role of Individual Attitudes," Working Papers EPRG 1515, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.

    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:sae:enejou:v:42:y:2021:i:3:p:1-26. 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: SAGE Publications (email available below). General contact details of provider: .

    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.