 Automatic Bill Payment and Salience Effects: Evidence from Electricity ConsumptionThe Review of Economics and Statistics, 2015, vol. 97, issue 2, 229-241 Abstract: The introduction of automatic bill payment (ABP) programs in 2005 eliminated the need for consumers to view recurring bills. If those enrolled in ABP programs offered by utilities and other service providers forgo inspection of their recurring bills, then price salience declines, prices perceived by boundedly rational agents fall, and consumption increases. This paper considers the impact of such programs on consumer demand and welfare and empirically tests whether enrollment in such programs increases demand. Results show ABP enrollment increases residential electricity consumption by 4.0% and commercial electricity consumption by as much as 8.1%. Enrollment in programs designed to smooth seasonal variation in monthly utility bills of low-income customers results in 6.7% greater electricity use. © 2015 The President and Fellows of Harvard College and the Massachusetts Institute of Technology Keywords: automatic bill payment; ABP; bills; recurring bills; price salience; consumption; consumer demand; welfare; electricity sonsumption (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:tpr:restat:v:97:y:2015:i:2:p:229-241 Ordering information: This journal article can be ordered from Access Statistics for this article The Review of Economics and Statistics is currently edited by Pierre Azoulay, Olivier Coibion, Will Dobbie, Raymond Fisman, Benjamin R. Handel, Brian A. Jacob, Kareen Rozen, Xiaoxia Shi, Tavneet Suri and Yi Xu More articles in The Review of Economics and Statistics from MIT Press |
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