Alert the inert: Switching costs and limited awareness in retail electricity markets
By: Dressler, Luisa and Weiergraeber, Stefan
.
Material type: 
BookPublisher: American Economic Journal: Microeconomics Description: 15(1), Feb, 2023: p.74-116.
In:
American Economic Journal: MicroeconomicsSummary: We quantify how switching costs and limited awareness affect consumer inertia in liberalized retail electricity markets by developing and estimating a structural demand model using a novel dataset on electricity contract choices in Belgium. Our data allow us to disentangle different sources of inertia by using a rich combination of macromoments and micromoments. We find that consumers perceive contracts as differentiated and both limited awareness and switching costs hinder efficient choices. Our counterfactuals reveal substantial welfare gains from alleviating both frictions, in particular switching costs, and that a well-regulated monopoly can generate similar consumer surplus as the current deregulated market. – Reproduced
| Item type | Current location | Call number | Vol info | Status | Date due | Barcode |
|---|---|---|---|---|---|---|
Articles
|
Indian Institute of Public Administration | 15(1), Feb, 2023: p.74-116 | Available | AR128615 |
We quantify how switching costs and limited awareness affect consumer inertia in liberalized retail electricity markets by developing and estimating a structural demand model using a novel dataset on electricity contract choices in Belgium. Our data allow us to disentangle different sources of inertia by using a rich combination of macromoments and micromoments. We find that consumers perceive contracts as differentiated and both limited awareness and switching costs hinder efficient choices. Our counterfactuals reveal substantial welfare gains from alleviating both frictions, in particular switching costs, and that a well-regulated monopoly can generate similar consumer surplus as the current deregulated market. – Reproduced
There are no comments for this item.