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Household internal and external electricity contract switching in EU countries

Author

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  • Joachim Schleich
  • Corinne Faure
  • Xavier Gassmann

Abstract

Using a representative sample of more than 13,000 households from eight countries in the European Union (EU), this article empirically studies the factors related to household electricity contract switching by distinguishing between internal switchers (households that switched contracts but stayed with the same supplier) from external switchers (households that switched to a new supplier). The econometric analysis includes individual preferences, household structural factors and socio-demographic characteristics, as well as electricity market characteristics. The study explicitly explores the role of risk and time preferences on switching behaviours, with risk and time preferences elicited through incentivized experiments as well as self-assessment scales. The main results suggest that internal and external switching are not related to the same factors, that risk and time preferences affect switching behaviours, and that renters are less likely to switch than homeowners; further, electricity market characteristics are found to affect household electricity contract switching.

Suggested Citation

  • Joachim Schleich & Corinne Faure & Xavier Gassmann, 2019. "Household internal and external electricity contract switching in EU countries," Applied Economics, Taylor & Francis Journals, vol. 51(1), pages 103-116, January.
    • Handle: RePEc:taf:applec:v:51:y:2019:i:1:p:103-116
    DOI: 10.1080/00036846.2018.1494379
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    Citations

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    Cited by:

    1. Tomasz Rokicki & Piotr Bórawski & Barbara Gradziuk & Piotr Gradziuk & Aldona Mrówczyńska-Kamińska & Joanna Kozak & Danuta Jolanta Guzal-Dec & Kamil Wojtczuk, 2021. "Differentiation and Changes of Household Electricity Prices in EU Countries," Energies, MDPI, vol. 14(21), pages 1-21, October.
    2. Christina Gravert, 2024. "From Intent to Inertia: Experimental Evidence from the Retail Electricity Market," CESifo Working Paper Series 11139, CESifo.
    3. Kim, Kyungah & Choi, Jihye & Lee, Jihee & Lee, Jongsu & Kim, Junghun, 2023. "Public preferences and increasing acceptance of time-varying electricity pricing for demand side management in South Korea," Energy Economics, Elsevier, vol. 119(C).
    4. Lang, Corey & Qiu, Yueming (Lucy) & Dong, Luran, 2023. "Increasing voluntary enrollment in time-of-use electricity rates: Findings from a survey experiment," Energy Policy, Elsevier, vol. 173(C).
    5. Massimo Dragotto & Marco Magnani & Paola Valbonesi, 2021. "Consumer inertia and firm incumbency in liberalised retail electricity markets: an empirical investigation," "Marco Fanno" Working Papers 0277, Dipartimento di Scienze Economiche "Marco Fanno".
    6. Littlechild, S., 2020. "An Overall Customer Satisfaction score for GB energy suppliers," Cambridge Working Papers in Economics 2090, Faculty of Economics, University of Cambridge.
    7. Groh, Elke D. & Ziegler, Andreas, 2022. "On the relevance of values, norms, and economic preferences for electricity consumption," Ecological Economics, Elsevier, vol. 192(C).
    8. Bonan, J. & Cattaneo, C. & d’Adda, G. & Galliera, A. & Tavoni, M., 2024. "Widening the scope: The direct and spillover effects of nudging water efficiency in the presence of other behavioral interventions," Journal of Environmental Economics and Management, Elsevier, vol. 127(C).
    9. Schleich, Joachim & Schuler, Johannes & Pfaff, Matthias & Frank, Regine, 2021. "Renewable rebound: Empirical evidence from household electricity tariff switching," Working Papers "Sustainability and Innovation" S07/2021, Fraunhofer Institute for Systems and Innovation Research (ISI).
    10. Groh, Elke D., 2022. "Exposure to wind turbines, regional identity and the willingness to pay for regionally produced electricity," Resource and Energy Economics, Elsevier, vol. 70(C).
    11. Ziegler, Andreas, 2020. "Heterogeneous preferences and the individual change to alternative electricity contracts," Energy Economics, Elsevier, vol. 91(C).
    12. Elke D. Groh & Andreas Ziegler, 2021. "On the relevance of values, norms, and economic preferences for electricity consumption," MAGKS Papers on Economics 202107, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    13. 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).
    14. Huisman, Hester M. & de Haan, Evert & Mulder, Machiel & Wieringa, Jaap E., 2024. "The combined effect of regulators’ and retailers’ actions to stimulate consumer participation in retail energy markets," Energy Policy, Elsevier, vol. 184(C).
    15. Feldhaus, Christoph & Lingens, Jörg & Löschel, Andreas & Zunker, Gerald, 2022. "Encouraging consumer activity through automatic switching of the electricity contract - A field experiment," Energy Policy, Elsevier, vol. 164(C).
    16. Mark Tocock & Dugald Tinch & Darla Hatton MacDonald & John M. Rose, 2023. "Managing the energy trilemma of reliability, affordability and renewables: Assessing consumer demands with discrete choice experiments," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 67(2), pages 155-175, April.

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