| Abstract: |
Augmenting consumer welfare was a key justification behind the reform of
utilities from the 1980s. But, three decades later, evidence is mounting that
consumer satisfaction with household utilities is quite uneven. Moreover,
governments, regulators and international organizations are increasingly
recognizing that consumers from specific socio-economic backgrounds may be
less satisfied than those from other backgrounds. To attend to this, instances
of demand-side regulation have been implemented, but there remains a lack of
empirical research on the precise links between consumers’ socio-economic
background and their satisfaction. This article contrasts consumers’ stated
and revealed preferences for three major household utility services
(electricity, gas and telecommunications, including internet) across twelve
European countries. Contrasting stated and revealed preferences has been
applied to policy on transportation, marketing and the environment: this
article pioneers the application of this technique to the analysis of
satisfaction with household utilities across multiple countries. We find
strong evidence that consumers’ socio-economic category matters: consumers
with lower levels of education, the elderly and those who are not employed
exhibit particular expenditure patterns and lower satisfaction levels
vis-à-vis some of or all the services under analysis. We conclude by
highlighting how our findings may be of use to regulators in the ongoing quest
to improve the quality of utility regulation. |