IAEE Members and subscribers to The Energy Journal: Please log in to access the full text article or receive discounted pricing for this article.

Prepress Content: The following article is a preprint of a scientific paper that has completed the peer-review process and been accepted for publication within The Energy Journal.

While the International Association for Energy Economics (IAEE) makes every effort to ensure the veracity of the material and the accuracy of the data therein, IAEE is not responsible for the citing of this content until the article is actually printed in a final version of The Energy Journal. For example, preprinted articles are often moved from issue to issue affecting page numbers, and actual volume and issue numbers. Care should be given when citing Energy Journal preprint articles.

Measuring Switching Costs in the Italian Residential Electricity Market

Abstract:
Residential electricity markets in European countries are still characterized by low consumer engagement, especially where regulated and liberalized markets coexist. Using an original dataset on 2015-2018 prices for the Italian electricity market, augmented with the number of residential consumers, we study the presence and magnitude of switching costs-i.e., time-based and cognitive-based costs on consumers changing providers-in the liberalized market. We find that switching from the incumbent involves high costs-almost as high as the yearly energy expenditure-while switching from competitors is less expensive. We also carry out two counterfactual analyses. In the first, we show that consumers would have incurred lower average switching costs over the years had the markset been less concentrated. In the second, we simulate how switching costs could evolve once regulated prices are phased out, and the market is fully liberalized.

Download Executive Summary Purchase ( $25 )

Keywords: Switching costs, Retail electricity market, Liberalization, Consumer behavior, Firm reputation

DOI: 10.5547/01956574.45.2.mmag

References: Reference information is available for this article. Join IAEE, log in, or purchase the article to view reference data.

Published in Volume 45, Number 2 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.

 

© 2024 International Association for Energy Economics | Privacy Policy | Return Policy