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Consumer choice on ecologically efficient water heaters: Marketing strategy and policy implications in Japan

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  • Goto, Hisanori
  • Goto, Mika
  • Sueyoshi, Toshiyuki

Abstract

This study examines how consumers select ecologically efficient water heaters in Japan. Energy conservation in household water heating is increasingly important for reducing an amount of CO2 emission, because the share of water heating in household energy consumption is approximately 30%. Recently, Japanese households have widely used ecologically efficient electric heat pump water heaters (Eco Cute) or gas-fired water heaters (Eco Jozu). The total number of such efficient water heaters sold in Japan was more than 2.5 million at the end of 2008. This study investigates various factors and impacts of marketing strategy for promoting the appliances in Japan. We apply mixed and nested logit models to a disaggregated choice data on water heaters from 2004 to 2008. This study considers retail energy prices, a government financial support and marketing activities as important factors for appliance selection. In addition, we consider consumers' housing attributes such as floor space and age of building. This empirical study finds two business implications. One of the two implications is that an increase in an energy price may enhance a choice probability of Eco Cute and Eco Jozu because a price increase invites consumer's consciousness on energy conservation so that a cost reduction on energy consumption becomes essential in a use of the efficient appliances. The other implication is that marketing activities, especially by recommendations from sales representatives and/or housing suppliers, are important for consumer behaviors. The other important findings are discussed in this study. This business experience in Japan is useful to the other countries where ecologically efficient water heaters are not popular at the current moment.

Suggested Citation

  • Goto, Hisanori & Goto, Mika & Sueyoshi, Toshiyuki, 2011. "Consumer choice on ecologically efficient water heaters: Marketing strategy and policy implications in Japan," Energy Economics, Elsevier, vol. 33(2), pages 195-208, March.
  • Handle: RePEc:eee:eneeco:v:33:y:2011:i:2:p:195-208
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    Cited by:

    1. Michelsen, Carl Christian & Madlener, Reinhard, 2012. "Homeowners' preferences for adopting innovative residential heating systems: A discrete choice analysis for Germany," Energy Economics, Elsevier, vol. 34(5), pages 1271-1283.
    2. 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).
    3. Michelsen, Carl Christian & Madlener, Reinhard, 2013. "Motivational factors influencing the homeowners’ decisions between residential heating systems: An empirical analysis for Germany," Energy Policy, Elsevier, vol. 57(C), pages 221-233.
    4. Kelly, Geoff, 2012. "Sustainability at home: Policy measures for energy-efficient appliances," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(9), pages 6851-6860.
    5. Michelsen, Carl Christian & Madlener, Reinhard, 2011. "Homeowners' Motivation to Adopt a Residential Heating System: A Principal-Component Analysis," FCN Working Papers 17/2011, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN), revised Jan 2013.
    6. Michelsen, Carl Christian & Madlener, Reinhard, 2011. "Homeowners' Preferences for Adopting Residential Heating Systems: A Discrete Choice Analysis for Germany," FCN Working Papers 9/2011, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    7. Wasi, Nada & Carson, Richard T., 2013. "The influence of rebate programs on the demand for water heaters: The case of New South Wales," Energy Economics, Elsevier, vol. 40(C), pages 645-656.
    8. Galarraga, Ibon & González-Eguino, Mikel & Markandya, Anil, 2011. "Willingness to pay and price elasticities of demand for energy-efficient appliances: Combining the hedonic approach and demand systems," Energy Economics, Elsevier, vol. 33(S1), pages 66-74.
    9. Arie ten Cate, 2012. "The socially optimal energy transition in a residential neighbourhood in the Netherlands," CPB Discussion Paper 222, CPB Netherlands Bureau for Economic Policy Analysis.
    10. repec:eee:enepol:v:113:y:2018:i:c:p:559-570 is not listed on IDEAS
    11. Obara, Shin'ya & Kikuchi, Yoshinobu & Ishikawa, Kyosuke & Kawai, Masahito & Kashiwaya, Yoshiaki, 2014. "Operational analysis of a small-capacity cogeneration system with a gas hydrate battery," Energy, Elsevier, vol. 74(C), pages 810-828.

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