The impact of energy prices on consumers: a tale of two crises

Andrew Burlinson (), Monica Giulietti (), Michael Waterson () and Victor Ajayi ()
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Andrew Burlinson: School of Economics, University of Sheffield, Sheffield S10 2TU, UK
Monica Giulietti: Nottingham University Business School, University of Nottingham and UK Energy Research Centre, UK
Michael Waterson: Department of Economics, University of Warwick, UK
Victor Ajayi: Energy Policy Research Centre, University of Cambridge, UK

No 2025008, Working Papers from The University of Sheffield, Department of Economics

Abstract: Two exogenous events, coupled with substantial data on household electricity and gas usage, enable us to examine detailed consumption effects of recent rises in energy prices in Britain resulting from the Russia-Ukraine conflict. We isolate two groups of consumers with similar characteristics, all initially on fixed price tariffs. One group, forcibly moved to variable price tariffs, suffered the price shock, the others remained on fixed price tariffs. Our difference-in-differences framework captures the impacts on the former group, finding significant negative consumption effects, particularly regarding gas usage. Differing effects across richer and poorer households are revealed, the poorest greatly reducing consumption.

Keywords: Energy consumption; difference-in-differences; energy crisis; smart meters (search for similar items in EconPapers)
JEL-codes: D12 E31 I19 L94 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2025-07
New Economics Papers: this item is included in nep-cis and nep-reg
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