The Tipping Point of Electricity Price Attention
Recent limitations of Natural gas deliveries from Russia to Europe have made electricity prices reach levels never before witnessed in several European countries. Because of the integration of the European electricity market, Norway, where electricity prices have been relatively low historically, has also been strongly affected. Such rapid increases in the electricity prices and price fluctuations can affect the population’s attention in both the private and public domains. Increased attention can in turn lead to social unrest if not handled properly by policymakers. In the present study, we analyze the attention to electricity prices using word counts in: i) all Norwegian newspapers, ii) all (Norwegian) Tweets, and iii) via (Norwegian) Google searches over a sample period from 2014-2022. We use threshold auto-regressive models, and find strong evidence that attention is non-linearly related to electricity price levels and price fluctuations. Specifically, depending on the attention measure employed, the estimated thresholds (tipping points) are €51.839/MWh (Twitter), €56/656/MWh (Google searches), and €58.710/MWh (Newspapers). The results have important policy implications as they point to specific price levels for which the society becomes increasingly concerned about the electricity prices
Year of publication: |
[2023]
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Authors: | Haugom, Erik ; Lyocsa, Stefan ; Halousková, Martina |
Publisher: |
[S.l.] : SSRN |
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