Do government-initiated energy comparison sites encourage consumer search and lower prices? Evidence from an online randomized controlled experiment in Australia

Main Uddin, Liang Wang and Russell Smyth

Journal of Economic Behavior & Organization, 2021, vol. 188, issue C, 167-182

Abstract: We conduct an online randomized controlled experiment in Australia in order to examine whether government initiatives to encourage the use of energy comparison sites increase consumer search and result in lower prices. Despite significant price variations across energy retailers, our experiment indicates that while providing information about the potential gains from using the government-owned Victoria Energy Compare (VEC) website encourages participants to visit the website, it is not effective in inducing them to contact, or switch, retailers who are providing better offers. Moreover, low-income individuals who visited the VEC website due to the availability of a $50 bonus are less likely to contact retailers for a better deal in order to switch retailers, and end up paying a higher cost of per unit kWh electricity and spending more on total electricity expenditure. Our findings imply that promoting government-initiated comparison sites is not sufficient to increase competition and that providing consumers with financial incentives for using these sites in order to encourage competition and improve outcomes of the energy poor may potentially backfire.

Keywords: VEC; Financial incentive; Energy price; Field experiment; Australia (search for similar items in EconPapers)
JEL-codes: H24 H31 Q43 Q48 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Working Paper: Do government-initiated energy comparison sites encourage consumer search and lower prices? Evidence from an online randomized controlled experiment in Australia (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:188:y:2021:i:c:p:167-182

DOI: 10.1016/j.jebo.2021.05.016

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