Switching behaviour of consumers across options in the energy market: a comparative analysis in Mexico

Abstract

This paper analyses how economic, behavioural, and service attributes influence households’ decisions to switch among three energy options: LP gas, electricity, and renewable energy. While previous studies in switching behaviour have assessed economic, behavioural, and services-related attributes separately, this paper proposes an integrative model that includes these three factors together. Mexico has shale gas reserves in monopolistic hands which may face the entrance of new participants. This paper proposes a conceptual framework for switching behaviour in energy. Based on 161 surveys from Mexican households, the impact of 17 variables on switching decisions is measured with regression techniques. Findings suggest positive effects of high switching costs and low satisfaction level on switching intentions while consumption habits and social norms were found to produce mixed results on consumers’ switching decisions. Some effects of inertial and locked-in behaviours explain the intriguing findings. Implications ranging from energy marketing for new entrants, to energy policy making, to further research are discussed.