Payment Matters? - An Exploratory Study into the Pre-Payment Electricity Metering

Abstract

In this paper we look at the role of pre-payment (in the context of prepayment metering) for household electricity consumption. Using a matching approach, we find that households paying their electricity up-front tend to consume no less electricity than households paying ex post. This is despite facing a higher tariff and higher transaction costs. In the second part of the paper, we explore to what extent this finding can be linked to an increase in payment flexibility under a pre-payment regime. Using data from the main electricity supplier in Northern Ireland (NIE Energy), we explore how people top-up their pre-payment meters and whether there is a link between people's top-up behaviour and their electricity consumption.