The determinants of consumer delinquency : evidences from the heating industry

Abstract

The default payment behavior of users is a topic of concern for behavioral economists, and it is also an urgent problem to be solved in the daily operation of enterprises. In the centralized district heating network industry, there is a phenomenon that a considerable number of users pay their fees after the prescribed payment date, which brings challenges to the operation of heating companies. Based on a centralized district heating network company named Zhonghuan Huanhui, this paper studies the formation of users' payment delinquency behavior and what factors will affect users' payment delinquency behavior, using its payment data of 1388403 users measured in 18 regions (cities, counties and districts) from 2018 to 2020. The main findings of the study are as follows: 1. Users have payment delinquency, and users who defaulted in the previous year are more likely to default in the next year. 2. the installation of meters significantly reduced the probability of delinquency by 12.5% compared to non-metered customers, and that the installation of meters also influenced the length of delinquency by 14.4% for metered customers compared to non-metered customers. 3. Air quality in metered cities improved significantly after meter installation compared to unmetered cities, specifically, the air quality index decreased by 0.054 to 0.132 after meter installation. 4. the average daily temperature and the average daily wind during the heating season will affect customers' choice of heating in the following year, especially those who stop heating. In addition to behavioral economics, our research also provides evidence for research on environmental protection and public goods.