Investment In Energy Efficiency: Do The Characteristics Of Firms Matter?
The literature on energy efficiency provides numerous examples of apparently profitable technologies that are not universally adopted. Yet according to the standard neoclassical theory of investment, profit-maximizing firms should undertake all investments with a positive net present value. The standard theory also holds that the discount rate for computing the present value of a project should be the return available on other projects in the same risk class, and therefore should not depend on characteristics of the firm. This model as applied to energy-saving investments is tested by examining whether firms'characteristics influence their decision to join the Environmental Protection Agency's voluntary Green Lights program. A discrete choice regression is estimated over a large sample of participating and nonparticipating firms. Missing values in the data matrix are replaced with multiple imputations from a distribution estimated using the expectation-maximization algorithm. The results show that (1) substantial improvements in the power of hypothesis tests can be achieved through maximum-likelihood imputation of missing data, and (2) contrary to the conventional theory, the characteristics of firms do affect their decision to join Green Lights and commit to a program of investments in lighting efficiency. © 1998 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 80 (1998)
Issue (Month): 1 (February)
|Contact details of provider:|| Web page: http://mitpress.mit.edu/journals/|
|Order Information:||Web: http://mitpress.mit.edu/journal-home.tcl?issn=00346535|
When requesting a correction, please mention this item's handle: RePEc:tpr:restat:v:80:y:1998:i:1:p:95-107. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anna Pollock-Nelson)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.