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Do energy prices influence investment in energy efficiency? Evidence from energy star appliances

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  • Jacobsen, Grant D.

Abstract

I examine whether electricity prices influence the likelihood that consumers purchase high efficiency appliances by using state-year panel data on electricity prices and the proportion of sales of new appliances that involve high efficiency “Energy Star” models. I find no evidence that electricity prices affect the propensity for consumers to choose high efficiency appliances. Point estimates are extremely small and precisely estimated. The findings suggest that price-based energy policies may be limited in the extent to which they increase investment in residential energy efficiency, which has been considered one of the lowest cost opportunities for reducing carbon emissions.

Suggested Citation

  • Jacobsen, Grant D., 2015. "Do energy prices influence investment in energy efficiency? Evidence from energy star appliances," Journal of Environmental Economics and Management, Elsevier, vol. 74(C), pages 94-106.
  • Handle: RePEc:eee:jeeman:v:74:y:2015:i:c:p:94-106
    DOI: 10.1016/j.jeem.2015.09.004
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Lucas W. Davis & Gilbert E. Metcalf, 2016. "Does Better Information Lead to Better Choices? Evidence from Energy-Efficiency Labels," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 3(3), pages 589-625.
    2. Walls, Margaret & Gerarden, Todd & Palmer, Karen & Bak, Xian Fang, 2017. "Is energy efficiency capitalized into home prices? Evidence from three U.S. cities," Journal of Environmental Economics and Management, Elsevier, vol. 82(C), pages 104-124.
    3. Daniel C. Matisoff & Douglas S. Noonan & Mallory E. Flowers, 2016. "Policy Monitor—Green Buildings: Economics and Policies," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 10(2), pages 329-346.
    4. Daniel A. Brent & Michael Ward, 2017. "Energy Efficiency and Financial Literacy," Departmental Working Papers 2017-04, Department of Economics, Louisiana State University.

    More about this item

    Keywords

    Energy efficiency; Energy Star; Appliances; Electricity prices; Energy efficiency gap; Energy efficiency paradox;

    JEL classification:

    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • D1 - Microeconomics - - Household Behavior

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