Economics at your fingertips  

It’s not price; It’s quality. Satisfaction and price fairness perception

Raul Jimenez Mori

World Development, 2021, vol. 139, issue C

Abstract: In developing countries, poor quality infrastructure that is highly subsidized is typically associated with populist political interference. In such a context, implementing the cost-recovery tariffs necessary to improve infrastructure services is a political challenge. This paper examines how levels of end-user satisfaction and price fairness perception respond to different price-quality mixes of electricity services in the urban Dominican Republic. The analysis exploits a rich dataset that includes informal and formal users, as well as heterogeneity in a set of service characteristics (i.e., reliability and commercial quality). I further exploit temporal variation in exposure to service improvements and electricity subsidies to evaluate if consumer attitudes change over time. The results suggest that the marginal positive effect of improvements in service quality on satisfaction is greater than the marginal negative effects of increasing prices and eliminating subsidies combined. In this case study, I find no evidence of attitude adaptation. Overall, the results suggest that price adjustments related to electricity service improvements are associated with a lasting increase in customer satisfaction.

Keywords: Consumer satisfaction; Price fairness; Electricity services; Electricity prices; Quality of electricity services; Subsidies (search for similar items in EconPapers)
JEL-codes: D60 L94 L98 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

DOI: 10.1016/j.worlddev.2020.105302

Access Statistics for this article

World Development is currently edited by O. T. Coomes

More articles in World Development from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

Page updated 2021-06-30
Handle: RePEc:eee:wdevel:v:139:y:2021:i:c:s0305750x20304290