The impact of the energy price crisis on GB consumers: a difference-in-difference experiment

727/2024 Victor Ajayi, Andrew Burlinson, Monica Giulietti, and Michael Waterson

727/2024 Andrew Burlinson, Monica Giulietti, Michael Waterson, and Victor Ajayi

Two exogenous events, coupled with substantial data on individual household electricity and gas usage, enable us to examine detailed consumption effects of recent rises in gas and electricity prices in Britain resulting from the Russia-Ukraine conflict. We isolate two samples of consumers with similar characteristics, all initially on fixed price contracts. One group, forcibly moved to variable prices, suffered the price shock, the others remained on fixed prices. Our diff-in-diff framework captures the impacts on the former group, finding significant consumption effects, particularly regarding gas usage. Differing effects across richer and poorer households are revealed, the poorest greatly reducing consumption.

(Revised June 2025)

Political Economy