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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.

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  • 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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    7. Ohler, Adrienne M. & Loomis, David G. & Ilves, Kadi, 2020. "A study of electricity savings from energy star appliances using household survey data," Energy Policy, Elsevier, vol. 144(C).
    8. Filippini, Massimo & Kumar, Nilkanth & Srinivasan, Suchita, 2020. "Energy-related financial literacy and bounded rationality in appliance replacement attitudes: evidence from Nepal," Environment and Development Economics, Cambridge University Press, vol. 25(4), pages 399-422, August.
    9. 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.
    10. Axel Gautier & Julien Jacqmin, 2020. "PV adoption: the role of distribution tariffs under net metering," Journal of Regulatory Economics, Springer, vol. 57(1), pages 53-73, February.
    11. Kiso, Takahiko & Chan, H. Ron & Arino, Yosuke, 2022. "Contrasting effects of electricity prices on retrofit and new-build installations of solar PV: Fukushima as a natural experiment," Journal of Environmental Economics and Management, Elsevier, vol. 115(C).
    12. Lang, Ghislaine & Lanz, Bruno, 2021. "Energy efficiency, information, and the acceptability of rent increases: A survey experiment with tenants," Energy Economics, Elsevier, vol. 95(C).
    13. 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.
    14. Houde, Sébastien & Myers, Erica, 2021. "Are consumers attentive to local energy costs? Evidence from the appliance market," Journal of Public Economics, Elsevier, vol. 201(C).
    15. Baldini, Mattia & Trivella, Alessio & Wente, Jordan William, 2018. "The impact of socioeconomic and behavioural factors for purchasing energy efficient household appliances: A case study for Denmark," Energy Policy, Elsevier, vol. 120(C), pages 503-513.
    16. 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.
    17. Iztok Podbregar & Sanja Filipović & Mirjana Radovanović & Olga Mirković Isaeva & Polona Šprajc, 2021. "Electricity Prices and Consumer Behavior, Case Study Serbia—Randomized Control Trials Method," Energies, MDPI, vol. 14(3), pages 1-12, January.
    18. Salim Turdaliev, 2021. "Increasing Block Rate Electricity Pricing and Propensity to Purchase Electrical Appliances: Evidence from a Natural Experiment in Russia," Energies, MDPI, vol. 14(21), pages 1-20, October.
    19. 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.
    20. Li, Wei & Sun, Wen & Li, Guomin & Jin, Baihui & Wu, Wen & Cui, Pengfei & Zhao, Guohao, 2018. "Transmission mechanism between energy prices and carbon emissions using geographically weighted regression," Energy Policy, Elsevier, vol. 115(C), pages 434-442.
    21. Hamed, Mohammad M. & Ali, Hesham & Abdelal, Qasem, 2022. "Forecasting annual electric power consumption using a random parameters model with heterogeneity in means and variances," Energy, Elsevier, vol. 255(C).
    22. Wang, Keying & Wu, Meng & Sun, Yongping & Shi, Xunpeng & Sun, Ao & Zhang, Ping, 2019. "Resource abundance, industrial structure, and regional carbon emissions efficiency in China," Resources Policy, Elsevier, vol. 60(C), pages 203-214.
    23. Damien Dussaux, 2020. "The joint effects of energy prices and carbon taxes on environmental and economic performance: Evidence from the French manufacturing sector," OECD Environment Working Papers 154, OECD Publishing.
    24. Borozan, Djula, 2018. "Regional-level household energy consumption determinants: The european perspective," Renewable and Sustainable Energy Reviews, Elsevier, vol. 90(C), pages 347-355.

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    More about this item

    Keywords

    Energy efficiency; Energy Star; Appliances; Electricity prices; Energy efficiency gap; Energy efficiency paradox;
    All these keywords.

    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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