Retrospective evaluation of appliance price trends
AbstractReal prices of major appliances (refrigerators, dishwashers, heating and cooling equipment) have been falling since the late 1970s despite increases in appliance efficiency and other quality variables. This paper demonstrates that historic increases in efficiency over time, including those resulting from minimum efficiency standards, incur smaller price increases than were expected by the Department of Energy (DOE) forecasts made in conjunction with standards. This effect can be explained by technological innovation, which lowers the cost of efficiency, and by market changes contributing to lower markups and economies of scale in production of higher efficiency units. We reach four principal conclusions about appliance trends and retail price setting: 1. For the past several decades, the retail price of appliances has been steadily falling while efficiency has been increasing. 2. Past retail price predictions made by the DOE analyses of efficiency standards, assuming constant prices over time, have tended to overestimate retail prices. 3. The average incremental price to increase appliance efficiency has declined over time. DOE technical support documents have typically overestimated this incremental price and retail prices. 4. Changes in retail markups and economies of scale in production of more efficient appliances may have contributed to declines in prices of efficient appliances.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Energy Policy.
Volume (Year): 37 (2009)
Issue (Month): 2 (February)
Contact details of provider:
Web page: http://www.elsevier.com/locate/enpol
Appliance efficiency standards Price forecasts;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Richard G. Newell & Adam B. Jaffe & Robert N. Stavins, 1999.
"The Induced Innovation Hypothesis And Energy-Saving Technological Change,"
The Quarterly Journal of Economics,
MIT Press, vol. 114(3), pages 941-975, August.
- Stavins, Robert & Jaffe, Adam & Newell, Richard, 1998. "The Induced Innovation Hypothesis and Energy-Saving Technological Change," Discussion Papers dp-98-12-rev, Resources For the Future.
- Richard G. Newell & Adam B. Jaffe & Robert N. Stavins, 1998. "The Induced Innovation Hypothesis and Energy-Saving Technological Change," NBER Working Papers 6437, National Bureau of Economic Research, Inc.
- Greening, Lorna A & Sanstad, Alan H & McMahon, James E, 1997. "Effects of Appliance Standards on Product Price and Attributes: An Hedonic Pricing Model," Journal of Regulatory Economics, Springer, vol. 11(2), pages 181-94, March.
- Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
- Siderius, Hans-Paul, 2013. "The role of experience curves for setting MEPS for appliances," Energy Policy, Elsevier, vol. 59(C), pages 762-772.
- David Simpson, 2011. "Do Regulators Overestimate the Costs of Regulation?," NCEE Working Paper Series 201107, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Dec 2011.
- Weiss, Martin & Patel, Martin K. & Junginger, Martin & Blok, Kornelis, 2010. "Analyzing price and efficiency dynamics of large appliances with the experience curve approach," Energy Policy, Elsevier, vol. 38(2), pages 770-783, February.
- Panzone, Luca A., 2013. "Saving money vs investing money: Do energy ratings influence consumer demand for energy efficient goods?," Energy Economics, Elsevier, vol. 38(C), pages 51-63.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.