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Retrospective evaluation of appliance price trends


  • Dale, Larry
  • Antinori, Camille
  • McNeil, Michael
  • McMahon, James E.
  • Sydny Fujita, K.


Real 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.

Suggested Citation

  • Dale, Larry & Antinori, Camille & McNeil, Michael & McMahon, James E. & Sydny Fujita, K., 2009. "Retrospective evaluation of appliance price trends," Energy Policy, Elsevier, vol. 37(2), pages 597-605, February.
  • Handle: RePEc:eee:enepol:v:37:y:2009:i:2:p:597-605

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    References listed on IDEAS

    1. 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..
    2. Richard G. Newell & Adam B. Jaffe & Robert N. Stavins, 1999. "The Induced Innovation Hypothesis and Energy-Saving Technological Change," The Quarterly Journal of Economics, Oxford University Press, vol. 114(3), pages 941-975.
    3. Uma K. Srivastava & Earl O. Heady, 1973. "Technological Change and Relative Factor Shares in Indian Agriculture: An Empirical Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 55(3), pages 509-514.
    4. 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 181-194, March.
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    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. 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.
    2. Kopits, Elizabeth & McGartland, Al & Morgan, Cynthia & Pasurka, Carl & Shadbegian, Ron & Simon, Nathalie B. & Simpson, David & Wolverton, Ann, 2014. "Retrospective cost analyses of EPA regulations: a case study approach," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 5(02), pages 173-193, June.
    3. Siderius, Hans-Paul, 2014. "Setting MEPS for electronic products," Energy Policy, Elsevier, vol. 70(C), pages 1-13.
    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. 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.
    6. repec:eee:appene:v:205:y:2017:i:c:p:453-464 is not listed on IDEAS
    7. Simpson R. David, 2014. "Do regulators overestimate the costs of regulation?," Journal of Benefit-Cost Analysis, De Gruyter, vol. 5(2), pages 1-18, June.
    8. Desroches, Louis-Benoit & Garbesi, Karina & Kantner, Colleen & Van Buskirk, Robert & Yang, Hung-Chia, 2013. "Incorporating experience curves in appliance standards analysis," Energy Policy, Elsevier, vol. 52(C), pages 402-416.
    9. Desroches, Louis-Benoit & Ganeshalingam, Mohan, 2015. "The dynamics of incremental costs of efficient television display technologies," Technological Forecasting and Social Change, Elsevier, vol. 90(PB), pages 562-574.
    10. Siderius, Hans-Paul, 2013. "The role of experience curves for setting MEPS for appliances," Energy Policy, Elsevier, vol. 59(C), pages 762-772.
    11. Martin Junginger & Wilfried van Sark & André Faaij (ed.), 2010. "Technological Learning in the Energy Sector," Books, Edward Elgar Publishing, number 13741.
    12. 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.


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