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The impact of energy prices on product innovation: Evidence from the UK refrigerator market

Author

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  • François Cohen

    (CERNA i3 - Centre d'économie industrielle i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique)

  • Matthieu Glachant

    (CERNA i3 - Centre d'économie industrielle i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique)

  • Magnus Söderberg

    (CERNA i3 - Centre d'économie industrielle i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper uses product-level data from the UK refrigerator market to evaluate the impact of electricity prices on product innovation. Our best estimate is that a 10% increase in the electricity price reduces the average energy consumption of commercialized refrigerator models by 2%. A large share of this reduction is explained by a reduction of freezing space. We also show that the exit of energy-inefficient products contributes more to energy reduction than the launch of new energy-efficient models. These findings suggest that innovation – the development of better technologies embodied in new products – does not respond strongly to energy price variations.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • François Cohen & Matthieu Glachant & Magnus Söderberg, 2017. "The impact of energy prices on product innovation: Evidence from the UK refrigerator market," Post-Print hal-01952982, HAL.
    • Handle: RePEc:hal:journl:hal-01952982
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Lin, Boqiang & Chen, Yufang, 2019. "Does electricity price matter for innovation in renewable energy technologies in China?," Energy Economics, Elsevier, vol. 78(C), pages 259-266.
    2. Mingyue Wang & Yingming Li & Zitong Wang & Junqiang Li, 2022. "The Heterogeneous Relationship between Pollution Charges and Enterprise Green Technology Innovation, Based on the Data of Chinese Industrial Enterprises," Energies, MDPI, vol. 15(5), pages 1-20, February.
    3. Anne Kesselring, 2023. "Willingness-to-Pay for Energy Efficiency: Evidence from the European Common Market," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 86(4), pages 893-945, December.
    4. Francois Cohen and Giulia Valacchi, 2022. "The Heterogeneous Impact of Coal Prices on the Location of Cleaner and Dirtier Steel Plants," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2).
    5. 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.
    6. Angelo Maiorino & Adrián Mota-Babiloni & Manuel Gesù Del Duca & Ciro Aprea, 2021. "Scheduling Optimization of a Cabinet Refrigerator Incorporating a Phase Change Material to Reduce Its Indirect Environmental Impact," Energies, MDPI, vol. 14(8), pages 1-17, April.
    7. Francois Cohen & Giulia Valacchi, 2017. "Do firms innovate if they can relocate? Evidence from te steel industry," CIES Research Paper series 55-2017, Centre for International Environmental Studies, The Graduate Institute.
    8. Francois Cohen & Giulia Valacchi, 2017. "The Heterogeneous Impact of Coal Prices on the Location of Dirty and Clean Steel Plants," CIES Research Paper series 55-2017, Centre for International Environmental Studies, The Graduate Institute.

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    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L68 - Industrial Organization - - Industry Studies: Manufacturing - - - Appliances; Furniture; Other Consumer Durables
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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