Rocha, M., Baddeley, M., Pollitt, M. and Weeks, M.

Addressing self-disconnection among prepayment energy consumers: A behavioural approach

Energy Economics

Vol. 81 pp. 273-286 (2019)

Abstract: This paper explores links between self-control in decision-making and self-disconnection by households using energy prepayment meters. Self-disconnection happens when households exhaust all available credit in their meter and are left without a supply of energy because they have been unable to top up. This has serious consequences for the well-being of households and also increases firms' costs. We explore behavioural characteristics associated with self-disconnection and present saving plans to help households minimise self-disconnection. We show that, in our sample, stated self-disconnection is positively associated with lower levels of goal achievement. We also show that households which have already experienced self-disconnection are more likely to accept an energy savings plan. It is relevant and promising that these households tend to select saving plans most likely to minimise their likelihood of self-disconnection. Our findings give some useful insights for energy policy-making, both for policy-makers interested in alleviating energy poverty and for energy utilities keen to limit self-disconnection.

Keywords: Goal achievement, Household finance, Prepayment meters, Self-disconnection

JEL Codes: D10, D14, D90, Q41, Q48, R20

Author links: Melvyn Weeks

Publisher's Link: http://www.doi.org/10.1016/j.eneco.2019.03.025