"Measuring Switching Costs in the Italian Residential Electricity Market"

This paper, published in 'The Energy Journal', investigates the existence and magnitude of consumers switching costs – namely, time-based and cognitive-based costs on consumers changing providers – in the Italian residential electricity market. Such costs may lead to consumer inertia in making subscription choices; in turn, they significantly hamper competition and reduce efficiency especially in markets, such as the energy market, where the path towards full liberalization is still ongoing. Results show that switching can be very costly when it involves incumbent’s customers and it is less expensive for customers of smaller competitors; this fact reinforces incumbency positions. We also find that a less concentrated electricity market, on average, would pose less switching barriers to consumers.

Authors:
Marco Magnani, Department of Economics and Management, University of Padua
Fabio M. Manenti, Department of Economics and Management, University of Padua
Paola Valbonesi, Department of Economics and Management, University of Padua

Download their full article here: https://unipd.link/Paper_Magnani_Manenti_Valbonesi_Electricity