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The influence of rebate programs on the demand for water heaters: The case of New South Wales

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  • Wasi, Nada
  • Carson, Richard T.

Abstract

This paper examines the role of Australian hot water system rebate programs in shifting the existing stock of electric water heaters toward more climate friendly versions using two unique data sets from New South Wales homeowners. The first data set is based on a survey of households who recently purchased a water heater before and after the rebate programs were in place. The other is based on a set of stated preference questions asked of households soon to face a replacement decision. While the former allows us to look at recent responses, the latter enables us to forecast future demand. We find that the programs significantly increase shares of solar/heat pump systems. The programs, however, appear less effective in reducing the stock of electric heaters for households with access to natural gas. This pattern is consistent in both datasets. Results from the discrete choice experiments suggest considerable heterogeneity with respect to household preferences toward different types of water heaters and the discount rates they hold. The effective cost of reducing carbon emissions via incentives for water heater replacement is considered from the counterfactual perspective of no government incentives.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:eneeco:v:40:y:2013:i:c:p:645-656
    DOI: 10.1016/j.eneco.2013.08.009
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    5. Brent, Daniel A. & Ward, Michael B., 2018. "Energy efficiency and financial literacy," Journal of Environmental Economics and Management, Elsevier, vol. 90(C), pages 181-216.
    6. Marlena Piekut, 2021. "The Consumption of Renewable Energy Sources (RES) by the European Union Households between 2004 and 2019," Energies, MDPI, vol. 14(17), pages 1-31, September.
    7. Ma, Ben & Yu, Yihua & Urban, Frauke, 2018. "Green transition of energy systems in rural China: National survey evidence of households’ discrete choices on water heaters," Energy Policy, Elsevier, vol. 113(C), pages 559-570.
    8. Caputo, Vincenzina & Scarpa, Riccardo & Nayga, Rodolfo M. & Ortega, David L., 2018. "Are preferences for food quality attributes really normally distributed? An analysis using flexible mixing distributions," Journal of choice modelling, Elsevier, vol. 28(C), pages 10-27.
    9. Doherty, Edel & Campbell, Danny & Hynes, Stephen, 2012. "Exploring cost heterogeneity in recreational demand," Working Papers 148832, National University of Ireland, Galway, Socio-Economic Marine Research Unit.
    10. Hlavinka, Alexander N. & Mjelde, James W. & Dharmasena, Senarath & Holland, Christine, 2016. "Forecasting the adoption of residential ductless heat pumps," Energy Economics, Elsevier, vol. 54(C), pages 60-67.
    11. David Hensher & Andrew Collins & William Greene, 2013. "Accounting for attribute non-attendance and common-metric aggregation in a probabilistic decision process mixed multinomial logit model: a warning on potential confounding," Transportation, Springer, vol. 40(5), pages 1003-1020, September.
    12. Higgins, Andrew & McNamara, Cheryl & Foliente, Greg, 2014. "Modelling future uptake of solar photo-voltaics and water heaters under different government incentives," Technological Forecasting and Social Change, Elsevier, vol. 83(C), pages 142-155.
    13. Nada Wasi & Jirawat Panpiemras & Wanwiphang Manachotphong, 2016. "The Impacts of the Billing System on Healthcare Utilization: The Case of Thai Civil Servant Medical Benefit Scheme," PIER Discussion Papers 48, Puey Ungphakorn Institute for Economic Research.
    14. Shigeru Matsumoto, 2018. "Consumer valuation of energy-saving features of residential air conditioners with hedonic and choice models," Empirical Economics, Springer, vol. 55(4), pages 1779-1806, December.
    15. Jacksohn, Anke & Grösche, Peter & Rehdanz, Katrin & Schröder, Carsten, 2019. "Drivers of renewable technology adoption in the household sector," Energy Economics, Elsevier, vol. 81(C), pages 216-226.
    16. Nada Wasi & Jirawat Panpiemras & Wanwiphang Manachotphong, 2021. "The Impact of a Billing System on Healthcare Utilization: Evidence from the Thai Civil Servant Medical Benefit Scheme," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 83(1), pages 228-251, February.

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    More about this item

    Keywords

    Climate change mitigation; Energy conservation programs; Consumer appliance choices; Discrete choice experiments;
    All these keywords.

    JEL classification:

    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments

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