IDEAS home Printed from https://ideas.repec.org/p/eti/dpaper/15063.html
   My bibliography  Save this paper

Consumer Valuations of Energy Efficiency Investments: The case of Vietnam's air conditioner market

Author

Listed:
  • MATSUMOTO Shigeru
  • OMATA Yukiko

Abstract

Typical consumers underestimate the benefits of future energy savings and underinvest in energy efficiency relative to the socially optimal level of energy efficiency. This phenomenon is called the energy-efficiency gap and has been widely studied in many developed countries. However, research on the energy-efficiency gap in developing countries remains very scant. In this study, we use sales data of air conditioners (ACs) in the Vietnamese market and conduct hedonic price analysis to examine how consumers in Vietnam value the energy efficiency of ACs. We find that the implicit discount rate in Vietnam's AC market exceeds 11.7%. This high implicit discount rate suggests that consumers in developing countries place much lower value on energy efficiency than consumers in developed countries, despite the fact that purchasing energy-efficient appliances offers the opportunity to save substantial amounts. Financial and technical support from developed countries are necessary to promote energy-efficient appliances in developing countries.

Suggested Citation

  • MATSUMOTO Shigeru & OMATA Yukiko, 2015. "Consumer Valuations of Energy Efficiency Investments: The case of Vietnam's air conditioner market," Discussion papers 15063, Research Institute of Economy, Trade and Industry (RIETI).
  • Handle: RePEc:eti:dpaper:15063
    as

    Download full text from publisher

    File URL: https://www.rieti.go.jp/jp/publications/dp/15e063.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Catherine Wolfram & Orie Shelef & Paul Gertler, 2012. "How Will Energy Demand Develop in the Developing World?," Journal of Economic Perspectives, American Economic Association, vol. 26(1), pages 119-138, Winter.
    2. Fran�ois Cohen & Matthieu Glachant & Magnus S�derberg, 2015. "The impact of energy prices on energy efficiency: Evidence from the UK refrigerator market," GRI Working Papers 179, Grantham Research Institute on Climate Change and the Environment.
    3. Silver, Mick & Heravi, Saeed, 2005. "A Failure in the Measurement of Inflation: Results From a Hedonic and Matched Experiment Using Scanner Data," Journal of Business & Economic Statistics, American Statistical Association, vol. 23, pages 269-281, July.
    4. Jerry A. Hausman, 1979. "Individual Discount Rates and the Purchase and Utilization of Energy-Using Durables," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 33-54, Spring.
    5. Train, Kenneth, 1985. "Discount rates in consumers' energy-related decisions: A review of the literature," Energy, Elsevier, vol. 10(12), pages 1243-1253.
    6. Arguea, N M & Hsiao, C & Taylor, G A, 1994. "Estimating Consumer Preferences Using Market Data--An Application to U.S. Automobile Demand," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 9(1), pages 1-18, Jan.-Marc.
    7. Meier, Alan K. & Whittier, Jack, 1983. "Consumer discount rates implied by purchases of energy-efficient refrigerators," Energy, Elsevier, vol. 8(12), pages 957-962.
    8. Dermot Gately, 1980. "Individual Discount Rates and the Purchase and Utilization of Energy-Using Durables: Comment," Bell Journal of Economics, The RAND Corporation, vol. 11(1), pages 373-374, Spring.
    9. Corum, Kenton R. & O'Neal, Dennis L., 1982. "Investment in energy-efficient houses: An estimate of discount rates implicit in new home construction practices," Energy, Elsevier, vol. 7(4), pages 389-400.
    Full references (including those not matched with items on IDEAS)

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eti:dpaper:15063. 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: (TANIMOTO, Toko). General contact details of provider: http://edirc.repec.org/data/rietijp.html .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.