Information as potential key determinant in switching electricity suppliers: An econometric study on Austrian households

In this paper, we investigate the drivers and obstacles to switch the electricity supplier for Austrian households. Since the liberalization of the market in 2001, the annual switching rates have remained at surprisingly low levels, leading to a loss of significant savings potential for Austrian households. The results of our exploratory study suggest that the knowledge about tariffs and electricity suppliers is the driving force for the decision to switch. The lack of information might also explain the low incentive effect of savings potentials. Thus, we suggest that for price competitive electricity suppliers, it might be more effective to familiarize customers with tariff structures and savings potentials than to advertise with “green electricity” as it is the common strategy at the moment.