Household electricity contract and provider switching in the EU

Using a representative sample of more than 11,000 households from eight European countries, this paper empirically studies the factors related to household electricity contract switching by distinguishing between households that switched contracts but stayed with the same supplier (internal switching) from those that switched to a new supplier (external switching). The econometric analysis includes a wide range of individual preferences, structural factors, and socio-demographic characteristics; in particular, it is the first paper to explicitly explore the role of time and risk preferences on switching behaviors. The main results suggest that internal and external switching are not related to the same factors, that risk and time preferences affect switching behaviors, and that renters are less likely to switch than homeowners.