Residential electricity competition is under investigation in a number of U.S. states due to alleged market imperfections including consumer behavior that is supposedly inconsistent with rational, economic decision-making. In this paper, I examine these issues and use a panel data of distribution utilities in Illinois during the period 2011–2017 to estimate demand models for regulated and competitive electricity services. I find that residential electricity consumers in Illinois are acting in a manner consistent with standard consumer behavior theory, with price elasticity of demand estimates that are generally in line with those in the literature, ranging between − 0.40 and − 0.60. Importantly, I find evidence that customers served by competitive suppliers are sensitive to the regulated default service price. Specifically, I find that a 1% decrease in the regulated default service price will lead to approximately 0.5% of customers served by competitive suppliers switching to the regulated default service. These findings call into question some of the underpinnings of policymakers’ critique of residential electricity competition.

中文翻译：

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电力竞争对居民消费者有用吗？来自默认和竞争性住宅用电服务需求模型的证据

由于涉嫌市场不完善，包括消费者行为，据称与理性的经济决策不一致，美国许多州正在对住宅用电竞争进行调查。在本文中，我研究了这些问题，并使用伊利诺伊州2011-2017年期间配电公司的面板数据估算了受监管和具有竞争力的电力服务的需求模型。我发现伊利诺伊州的居民用电者的行为与标准的消费者行为理论相一致，需求估算的价格弹性通常与文献中的相一致，介于-0.40和-0.60之间。重要的是，我发现有证据表明竞争性供应商服务的客户对规定的默认服务价格敏感。特别，我发现，受管制的默认服务价格下降1％，将导致大约0.5％的竞争性供应商所服务的客户转向受管制的默认服务。这些发现使人们对决策者批评住宅用电竞争的某些依据提出了质疑。