A Measure of Switching Costs in the GB Electricity Retail Market

Evens Salies

MPRA Paper from University Library of Munich, Germany

Abstract: In most liberalised electricity retail markets, incumbent firms still hold the majority of residential consumers. This situation focused the attention of regulatory institutions and energy economists on the determinants of consumers switching decisions. Fewer studies have, however, been devoted to measuring switching costs. In the present paper we calculate these costs in the Great Britain electricity retail market by revisiting the model suggested in Shy, O. (2002), A quick-and-easy method for estimating switching costs, International Journal of Industrial Organization, 20, pp. 71–87. The average net cost of switching regional incumbents is €385 while the net cost of switching back to them is negative for customers on standard credit or direct debit plans but positive for prepayment customers.

Keywords: Electricity Retail; Switching Costs; Undercut-Proof Property (search for similar items in EconPapers)
JEL-codes: D43 D83 L94 (search for similar items in EconPapers)
Date: 2005-06, Revised 2007-04
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/28255/2/MPRA_paper_28255.pdf original version (application/pdf)

Related works:
Working Paper: A measure of switching Costs in the GB electricity retail market (2022)
Working Paper: A measure of switching Costs in the GB electricity retail market (2022)
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: https://EconPapers.repec.org/RePEc:pra:mprapa:28255

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().