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Rebates, Loans, and Customers' Choice of Appliance Efficiency Level: Combining Stated- and Revealed-Preference Data

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Listed:
  • Kenneth E. Train
  • Terry Atherton

Abstract

Residential customers' choice of efficiency level for appliances, and their participation in demand-side management (DSM) programs, are examined using data on customers' stated preferences in hypothetical (i.e., conjoint-type) situations and their revealed preferences in real-world choices. The analysis provides information on customers' willingness to pay for energy savings, the importance of rebates in customers' decisions, and customers' response to DSM programs that offer loans for purchases of high-efficiency appliances. An estimated model is used to forecast the decisions of customers under: higher rebates, replacement of rebates with finance programs, offering of loans and rebates as alternative options for customers, and the elimination of DSM programs. We find that attractive loans (e.g., low interest rates, long repayment periods) are necessary to have the same effect as rebates. Programs that offer customers the option of loans or rebates are found to be far more effective than programs that offer only loans or only rebates.

Suggested Citation

  • Kenneth E. Train & Terry Atherton, 1995. "Rebates, Loans, and Customers' Choice of Appliance Efficiency Level: Combining Stated- and Revealed-Preference Data," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 55-70.
    • Handle: RePEc:aen:journl:1995v16-01-a04
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    Cited by:

    1. Galarraga, Ibon & Abadie, Luis M. & Ansuategi, Alberto, 2013. "Efficiency, effectiveness and implementation feasibility of energy efficiency rebates: The “Renove” plan in Spain," Energy Economics, Elsevier, vol. 40(S1), pages 98-107.
    2. Chappin, Emile J.L. & Schleich, Joachim & Guetlein, Marie-Charlotte & Faure, Corinne & Bouwmans, Ivo, 2022. "Linking of a multi-country discrete choice experiment and an agent-based model to simulate the diffusion of smart thermostats," Technological Forecasting and Social Change, Elsevier, vol. 180(C).
    3. Nicholas Rivers and Leslie Shiell, 2016. "Free-Riding on Energy Efficiency Subsidies: the Case of Natural Gas Furnaces in Canada," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4).
    4. Ansar, Jasmin & Sparks, Roger, 2009. "The experience curve, option value, and the energy paradox," Energy Policy, Elsevier, vol. 37(3), pages 1012-1020, March.
    5. Fran�ois Cohen & Matthieu Glachant & Magnus S�derberg, 2015. "The impact of energy prices on energy efficiency: Evidence from the UK refrigerator market," GRI Working Papers 179, Grantham Research Institute on Climate Change and the Environment.
    6. Glynn T. Tonsor & Ted C. Schroeder & Joost M. E. Pennings & James Mintert, 2009. "Consumer Valuations of Beef Steak Food Safety Enhancement in Canada, Japan, Mexico, and the United States," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 57(3), pages 395-416, September.
    7. Liddle, Brantley & Loi, Tian Sheng Allan & Owen, Anthony D. & Tao, Jacqueline, 2020. "Evaluating consumption and cost savings from new air-conditioner purchases: The case of Singapore," Energy Policy, Elsevier, vol. 145(C).
    8. Roelich, Katy & Knoeri, Christof & Steinberger, Julia K. & Varga, Liz & Blythe, Phil T. & Butler, David & Gupta, Rajat & Harrison, Gareth P. & Martin, Chris & Purnell, Phil, 2015. "Towards resource-efficient and service-oriented integrated infrastructure operation," Technological Forecasting and Social Change, Elsevier, vol. 92(C), pages 40-52.
    9. Tao, Jing & Yu, Suiran, 2011. "Implementation of energy efficiency standards of household refrigerator/freezer in China: Potential environmental and economic impacts," Applied Energy, Elsevier, vol. 88(5), pages 1890-1905, May.
    10. Anil Markandya & Xavier Labandeira & Ana Ramos, 2013. "Policy Instruments to Foster Energy Efficiency," Working Papers 01-2014, Economics for Energy.
    11. Datta, Souvik & Gulati, Sumeet, 2014. "Utility rebates for ENERGY STAR appliances: Are they effective?," Journal of Environmental Economics and Management, Elsevier, vol. 68(3), pages 480-506.
    12. Earnhart, Dietrich, 2002. "Combining Revealed and Stated Data to Examine Housing Decisions Using Discrete Choice Analysis," Journal of Urban Economics, Elsevier, vol. 51(1), pages 143-169, January.
    13. Amaia de Ayala & María del Mar Solà, 2022. "Assessing the EU Energy Efficiency Label for Appliances: Issues, Potential Improvements and Challenges," Energies, MDPI, vol. 15(12), pages 1-25, June.
    14. Gallardo, R. Karina & Olanie, Aaron & Ordóñez, Rita & Ostrom, Ostrom, 2015. "The Use of Electronic Payment Machines at Farmers Markets: Results from a Choice Experiment Study," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 18(1), pages 1-26, February.
    15. Mark K. Jaccard & John Nyboer & Crhis Bataille & Bryn Sadownik, 2003. "Modeling the Cost of Climate Policy: Distinguishing Between Alternative Cost Definitions and Long-Run Cost Dynamics," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 49-73.
    16. Zeng, Lei & Yu, Yang & Li, Jiayang, 2014. "China’s Promoting Energy-Efficient Products for the Benefit of the People Program in 2012: Results and analysis of the consumer impact study," Applied Energy, Elsevier, vol. 133(C), pages 22-32.
    17. Souvik Datta & Massimo Filippini, 2012. "Analysing the Impact of ENERGY STAR Rebate Policies in the US," CEPE Working paper series 12-86, CEPE Center for Energy Policy and Economics, ETH Zurich.
    18. Ruth, Matthias & Davidsdottir, Brynhildur & Laitner, Skip, 2000. "Impacts of market-based climate change policies on the US pulp and paper industry," Energy Policy, Elsevier, vol. 28(4), pages 259-270, April.
    19. Khachatryan, Hayk & Suh, Dong Hee & Xu, Wan & Useche, Pilar & Dukes, Michael D., 2019. "Towards sustainable water management: Preferences and willingness to pay for smart landscape irrigation technologies," Land Use Policy, Elsevier, vol. 85(C), pages 33-41.
    20. Milhan Moomen & Amirarsalan Mehrara Molan & Khaled Ksaibati, 2023. "A Random Parameters Multinomial Logit Model Analysis of Median Barrier Crash Injury Severity on Wyoming Interstates," Sustainability, MDPI, vol. 15(14), pages 1-17, July.

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    • F0 - International Economics - - General

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