scholarly journals Market Liberalization: Price Dispersion, Price Discrimination and Consumer Search in the German Electricity Markets

2018 ◽  
Author(s):  
Klaus Gugler ◽  
Sven Heim ◽  
Maarten C. W. Janssen ◽  
Mario Liebensteiner
Keyword(s):  
Price Discrimination ◽  
Electricity Markets ◽  
Price Dispersion ◽  
Consumer Search ◽  
Market Liberalization

scholarly journals Communication-Based Approach for Promoting Energy Consumer Switching: Some Evidence from Ofgem’s Database Trials in the United Kingdom

Energies ◽  
2020 ◽  
Vol 13 (19) ◽  
pp. 5179
Author(s):  
Muyi Yang ◽  
Yuanying Chi ◽  
Kristy Mamaril ◽  
Adam Berry ◽  
Xunpeng Shi ◽  
...  
Keyword(s):  
United Kingdom ◽  
Influencing Factors ◽  
Price Discrimination ◽  
Electricity Markets ◽  
Analytical Framework ◽  
Policy Makers ◽  
General Lack ◽  
The United Kingdom ◽  
Vulnerable Consumers ◽  
Consumer Switching

Prompted by rising concern about weak consumer switching and the practice of price discrimination, over the period of 2016–2019, the Office of Gas and Electricity Markets (Ofgem) undertook a series of trials on communication-based interventions to encourage consumer switching in the United Kingdom. The main purpose of this paper is to assess the experience of these Ofgem trials with a view to draw some lessons for policy makers. The analytical framework adopted for this purpose is informed by existing literature on the barriers for consumer switching. The results of the analysis suggest that while the Ofgem trials have made positive impacts on consumer switching, these impacts varied significantly across the trials, suggesting that some interventions were more effective than others. Further, the overall impacts of the Ofgem trials were moderate, as around 70% of participants did not switch suppliers even in the most impactful trial. This reflects a general lack of understanding in the literature about the behaviour-influencing factors, their impacts, and their context-connects. By implication, the difficulty in stimulating consumer switching, as demonstrated by the Ofgem trials, suggests that weak consumer switching and the practice of price discrimination may simply reflect significant competition, rather than a lack of it, especially if retail margins are not greater than the competitive level. In this case, the communication-based intervention aimed at encouraging consumer switching may lead to further price discrimination, especially for the most vulnerable consumers, who are more likely to stay with their incumbent suppliers.

scholarly journals Fairtrade Wine Price Dispersion in the United Kingdom

2017 ◽  
Vol 12 (4) ◽  
pp. 446-456 ◽  
Author(s):  
Britta Niklas ◽  
Karl Storchmann ◽  
Nick Vink
Keyword(s):  
United Kingdom ◽  
Least Squares ◽  
Price Dispersion ◽  
Ordinary Least Squares ◽  
Consumer Search ◽  
Lower Price ◽  
Weak Instruments ◽  
The United Kingdom ◽  
Substantial Bias ◽  
Squared Residuals

AbstractThis paper analyzes wine price dispersion in the United Kingdom. In particular, we are interested in examining whether Fairtrade wines are different from non-Fairtrade wines. Because Fairtrade wines serve an additional social purpose, one may think that consumers search less aggressively for the outlet with the lowest price, thus allowing for a larger price dispersion than for regular wines. We draw on data for about seven thousand wines from South Africa, Fairtrade and non-Fairtrade, sold in the United Kingdom between 2007 and 2012. In a first step, we run a hedonic regression model explaining the wine prices using Ordinary Least Squares (OLS) and Two-Stage Least Squares (2SLS) Instrumental Variable (IV) approaches. In the next step, we regress the squared residuals from the first step on a Fairtrade 0-1 dummy-variable. When using the squared residuals from the OLS model, we find that Fairtrade is a negative determinant of price dispersion. Therefore, Fairtrade wines exhibit a significant lower price dispersion than the comparison group. When using the squared residuals from the IV model, we find mixed results and suspect the presence of a substantial bias due to weak instruments. Finally, in order to avoid IV pitfalls, we ran Fairtrade and Non-Fairtrade wines in separate equations. We find support for the OLS results, i.e., Fairtrade wines appear to exhibit lower price dispersion than their non-Fairtrade counterparts. Whether this is due to consumer search is a priori unclear. (JEL Classifications: L31, L81, Q11)

scholarly journals Electricity saving in households due to the market liberalization and change in the consumer behaviour

Energetika ◽  
2016 ◽  
Vol 61 (3-4) ◽  
Author(s):  
Gatis Bažbauers ◽  
Uldis Bariss ◽  
Lelde Timma ◽  
Dace Lauka ◽  
Andra Blumberga ◽  
...  
Keyword(s):  
System Dynamics ◽  
Electricity Markets ◽  
Electricity Market ◽  
Electricity Consumption ◽  
Market Liberalization ◽  
Long Term Effects ◽  
Factors Affecting ◽  
Development Scenarios ◽  
Electricity Saving

In case of opening the electricity market, various factors interact with each other. Although research has been done on various factors affecting the liberal electricity market, little attention has been paid to studying the dynamic relations between the actors involved in the liberal electricity market and projections on electricity consumption in households. The main aim of the research is to explore both short- and long-term effects on the electricity consumption at liberal market conditions by modelling various development scenarios. The electricity market in operation in Latvia was used as the case study. For the simulation of electricity market liberalization, system dynamics has been chosen. This method can determine electricity savings in case of electricity market opening, because system dynamics allows conducting simulation of complex systems and analysing the obtained data to forecast probability of the development of several scenarios. Obtained results show that cumulative electricity savings in households could reach 560 GWh by the end of 2020 due to the opening of the electricity market, implementation of energy saving measures and other reasons. In case of scenario analysis using the change of consumption behaviour, it was obtained that the cumulative electricity saving could be almost twice as big if the majority of households were guided by the environmental concerns. Although the system dynamics model was based on the Latvian case study, its general application to other countries and electricity markets is also possible.

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