Do energy efficiency standards hurt consumers?: evidence from household appliance sales

Arlan Brucal and Michael Roberts

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We build novel welfare-based price indices for major household appliances that leverage changes in same-model prices and how consumers substitute between exiting, continuing and new models. We then evaluate how minimum energy efficiency requirements and changing criteria for Energy Star™ labels affected these indices in the U.S. between 2001 and 2011, a period of time when some appliances experienced standard changes while others did not. We find that prices declined while quality and consumer welfare increased, especially when standards become more stringent. We also find that much of the price index decline can be attributed to standards-induced innovation, or cannibalism, not to inter-manufacturer competition. Our results also add to a growing body of evidence that the Consumer Price Index exaggerates inflation due to inadequate account of quality and substitution to new goods.

Keywords: energy efficiency; standards; imperfect competition; price indices (search for similar items in EconPapers)
JEL-codes: D12 H23 L68 Q48 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2019-07-01
New Economics Papers: this item is included in nep-com, nep-eff, nep-ene and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Published in Journal of Environmental Economics and Management, 1, July, 2019, 96, pp. 88-107. ISSN: 1096-0449

Downloads: (external link)
http://eprints.lse.ac.uk/100772/ Open access version. (application/pdf)

Related works:
Journal Article: Do energy efficiency standards hurt consumers? Evidence from household appliance sales (2019)
Working Paper: Do Energy Efficiency Standards Hurt Consumers? Evidence from Household Appliance Sales (2017)
Working Paper: Do Energy Efficiency Standards Hurt Consumers? Evidence from Household Appliance Sales (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:100772

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