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Saving money vs investing money: Do energy ratings influence consumer demand for energy efficient goods?

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  • Panzone, Luca A.

Abstract

The article analyses economic barriers leading to the energy efficiency gap in the market for energy-using products by observing several million transactions in the UK over two years. The empirical exercise estimates AIDS models for refrigerators, washing machines, TVs, and light bulbs. Results indicate that market barriers are crucial in the demand for energy efficient options, and consumer response to changes in appliance prices, total expenditures, and energy prices depends on the possibility of behavioural adjustments in consumption. In contrast with the induced innovation hypothesis, current electricity prices can fail to induce innovation because of their short-term impact on disposable income, while consumers invest in energy efficiency when expecting electricity prices to rise in the future.

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Bibliographic Info

Article provided by Elsevier in its journal Energy Economics.

Volume (Year): 38 (2013)
Issue (Month): C ()
Pages: 51-63

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Handle: RePEc:eee:eneeco:v:38:y:2013:i:c:p:51-63

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Web page: http://www.elsevier.com/locate/eneco

Related research

Keywords: Energy-efficiency gap; Energy-using products; Electricity; Consumer behaviour; AIDS model;

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References

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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 S98-S107.

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