Smart Meters, Personalized Feedback and Retailer Switching in Electricity Markets

34 Pages Posted: 5 Mar 2016

See all articles by David P. Byrne

David P. Byrne

The University of Melbourne

Leslie A. Martin

University of Melbourne - Department of Economics

Charles Shenton

University of Melbourne

Date Written: February 3, 2016

Abstract

This paper uses a randomized experiment and a structural model to study the extent to which consumers value receiving personalized feedback from smart electricity meters. Using data from a market with retail competition, we examine whether consumers “vote with their feet”, either by switching retailers or exhibiting increased loyalty for their existing retailer, in response to messages they receive based on their smart meter data. We find consumers value being informed: randomly offering information from smart meters to consumers reduces the overall switching rate by 8%. Among customers who engage with their smart meter data we find a 21% reduction in retailer switching.

Keywords: Retail search, personalized feedback, smart meters, electricity

JEL Classification: D83, L13, L86

Suggested Citation

Byrne, David P. and Martin, Leslie A. and Shenton, Charles, Smart Meters, Personalized Feedback and Retailer Switching in Electricity Markets (February 3, 2016). Available at SSRN: https://ssrn.com/abstract=2741957 or http://dx.doi.org/10.2139/ssrn.2741957

David P. Byrne (Contact Author)

The University of Melbourne ( email )

Level 4
111 Barry Street
Melbourne, Victoria 3010
Australia

HOME PAGE: http://sites.google.com/view/dprbyrne/

Leslie A. Martin

University of Melbourne - Department of Economics ( email )

Melbourne, 3010
Australia

HOME PAGE: http://lesliemartin.org

Charles Shenton

University of Melbourne ( email )

185 Pelham Street
Carlton, Victoria 3053
Australia

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
70
Abstract Views
417
rank
351,645
PlumX Metrics