The switching behavior of large-scale electricity consumers in The Turkish electricity retail market. (January 2022)

• Record Type: Journal Article
• Authors: Erdogan, Murside Rabia; Camgoz, Selin Metin; Karan, Mehmet Baha; Berument, M. Hakan
• Is Part Of: Energy policy. Volume 160(2022)
• Publication Date: 2022-01
• Subjects: Energy markets -- Switching supplier -- Business economics and logit model; C25 -- D21 -- M21 -- R29; Energy policy -- Periodicals; Politique énergétique -- Périodiques; Electronic journals; 333.79
• DOI: 10.1016/j.enpol.2021.112701
• Languages: English
• ISSNs: 0301-4215

Abstract

Abstract: This paper studies the effects of various economic and psychological factors on the switching behavior of large-scale electricity consumers in Turkey. Switching frequency and switching direction are two variables used to analyze switching behavior. The former is concerned with how often retailers change their suppliers. On the other hand, switching direction measures the direction of switching preferences of consumers between two electricity suppliers since the incumbent has a brand advantage over new suppliers that creates inertia and may reduce competition in the market. The target group of this study is large-scale electricity consumers rather than residential consumers since the switching activities of large-scale consumers are more competitive. We employ a five-point Likert scale questionnaire to construct eight psychological and economic factors to explain switching activities. The estimates indicate that improving service quality and providing essential services are the main motivations for switching decisions. Satisfaction with primary services, the homogeneity of the retail electricity market, and switching costs enhance the status quo; however, clarity of contracts and assistance for electricity distribution services (maintenance, metering, billing, etc.) affect the switching activities. Highlights: Deregulation allows consumers to choose their providers with unregulated prices. . However, the level of consumer switching has not taken place as expected. Service quality & getting essential services are the main motives of switching. Quality of services, market homogeneity & switching costs enhance the status quo. Clarity of contracts & assistance for distributional services affect switching.