 What drives consumers to switch retailers? Evidence from the Alberta electricity marketYiang Guo, Derek E.H. Olmstead and Andrew H. Wilkins Energy Policy, 2025, vol. 206, issue C Abstract: This study examines consumer switching behaviour in Alberta’s retail electricity market, focusing on the impact of rate volatility, income, education, and age on search rates and product premia. The analysis reveals significant consumer inertia, with many customers remaining on default rate even when competitive alternatives offer lower rates. Higher electricity rates were found to significantly increase search activity and switching rates. Contrary to expectations, consumers living in higher-income and higher-educated areas more often made less cost-effective choices, often opting for the more expensive default rate, called the Regulated Rate Option (RRO). Consumers living in lower-income areas, despite being presumptively more price-sensitive, also showed a preference for the RRO, indicating potential market misjudgment. The findings highlight the importance of consumer information to foster a more competitive and efficient market, as many consumers appear to make non-cost-minimizing or suboptimal switching decisions, particularly during periods of rapid rate increases. Keywords: Electricity; Retail markets; Default rates; Consumer switching behaviour (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:206:y:2025:i:c:s0301421525002770 DOI: 10.1016/j.enpol.2025.114770 Access Statistics for this article Energy Policy is currently edited by N. France More articles in Energy Policy from Elsevier |
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