Power to the people: working-class demand for household power in 1930s Britain

The 1930s witnessed an intense struggle between gas and electricity suppliers for the working class market, where the incumbent utility--gas--was also a reasonably efficient (and cheaper) General Purpose Technology for most domestic uses. Local monopolies for each supplier boosted substitution effects between fuel types--as alternative fuels constituted the only local competition. Using newly-rediscovered returns from a major national household expenditure survey, we employ geographically-determined instrumental variables, more commonly used in the industrial organization literature, to show that gas provided a significant competitor, tempering electricity prices, while electricity demand was also responsive to marketing initiatives. Copyright 2011 Oxford University Press 2011 All rights reserved, Oxford University Press.