Saving money vs investing money: Do energy ratings influence consumer demand for energy efficient goods?
AbstractThe 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 InfoArticle provided by Elsevier in its journal Energy Economics.
Volume (Year): 38 (2013)
Issue (Month): C ()
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Web page: http://www.elsevier.com/locate/eneco
Energy-efficiency gap; Energy-using products; Electricity; Consumer behaviour; AIDS model;
Find related papers by JEL classification:
- C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
- Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
- Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
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