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The impact of socio-economic background on satisfaction: evidence for policy-makers

Journal of Regulatory Economics volume 46, pages 183–206 (2014)Cite this article

Abstract

Consumer satisfaction with utility services has received increased attention from firms, consumer associations, regulators and governments since the 1990s. Evidence is mounting that consumers in specific socio-economic groups express lower satisfaction levels than their peers, at least, in some utility markets. Seeing this as part of their remit to protect consumer welfare, governments and international organizations are exploring possible demand-side policy responses with the intention of ameliorating lower satisfaction levels of these groups of consumers. However, more information on the precise relationships between satisfaction and consumers’ socio-economic background is required if policy is to be proportional and effective. This paper provides new empirical knowledge on this topic by contrasting consumers’ stated and revealed preferences for five utility services (electricity, gas, fixed and cellular telephony and Internet) across twelve European countries. We find strong evidence that consumers’ socio-economic characteristics matter: consumers with lower levels of education, the elderly and those not employed exhibit particular expenditure patterns on, and lower satisfaction levels with, some utility services. However, this relationship is uneven and depends on the socio-economic category and service in question. We conclude by highlighting five findings which may be of use to policy-makers when considering whether demand-side regulatory policies are required

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Notes

  1. Surveys after EC (2007) also differed in that they dropped questions on access and price satisfaction (EC 2010a).

  2. The sample from EC (2007) includes 12,263 observations and the sample from EUROSTAT (2011) has 71,124 observations. Detailed information on sample sizes by country will be provided by authors on request.

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Acknowledgments

The research leading to these results has received funding from the European Community’s Seventh Framework Program under grant agreement No. 266887 (Project COCOPS), Socio-economic Sciences & Humanities. We would like to thank Michael Crew and the three anonymous reviewers for their insights and comments on earlier versions of this paper. We acknowledge support from the EC and EUROSTAT, particularly Peter Paul Borg, Emanuele Ciriolo, Adriaan Dierx, Gerard Hanney, Maria Lissowska, David Mair and Luca Protti.

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  1. Department of Economics, University of Cantabria, Av. De los Castros S.N., Cantabria, Santander, Spain

    Judith Clifton, Daniel Díaz-Fuentes & Marcos Fernández-Gutiérrez

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  1. Judith Clifton
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  3. Marcos Fernández-Gutiérrez
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Correspondence to Judith Clifton.

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Clifton, J., Díaz-Fuentes, D. & Fernández-Gutiérrez, M. The impact of socio-economic background on satisfaction: evidence for policy-makers. J Regul Econ 46, 183–206 (2014). https://doi.org/10.1007/s11149-014-9251-1

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  • DOI: https://doi.org/10.1007/s11149-014-9251-1

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