Data and Code for: Alert the Inert? Switching Costs and Limited Awareness in Retail Electricity Markets

Principal Investigator(s): View help for Principal Investigator(s) Luisa Dressler, Universite libre de Bruxelles - ECARES; Stefan Weiergraeber, Indiana University - Department of Economics

Version: View help for Version V1

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Project Citation:

Dressler, Luisa, and Weiergraeber, Stefan. Data and Code for: Alert the Inert? Switching Costs and Limited Awareness in Retail Electricity Markets. Nashville, TN: American Economic Association [publisher], 2023. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2023-01-25. https://doi.org/10.3886/E169643V1

Project Description

Summary: 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 data set 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.

Scope of Project

Subject Terms: Switching Costs; Limited Awareness; Retail Electricity Markets; Structural Demand Estimation

JEL Classification:
      D12 Consumer Economics: Empirical Analysis
      D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
      L13 Oligopoly and Other Imperfect Markets
      L97 Utilities: General

Geographic Coverage: Flanders, Belgium

Time Period(s): 1/1/2012 – 6/30/2016

Collection Date(s): 6/1/2015 – 12/1/2021

Universe: Retail electricity consumers in Flanders, Belgium.

Data Type(s): aggregate data; observational data; other; survey data

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Published Versions

V1 [2023-01-25]

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