Consumer myopia, imperfect competition and the energy efficiency gap: evidence from the UK refrigerator market

Francois Cohen, Matthieu Glachant and Magnus Söderberg

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

Abstract: The empirical literature on the energy efficiency gap concentrates on demand inefficiencies in the energy-using durables markets and finds evidence that consumers underestimate future energy costs when purchasing a new appliance. We take a broader view and also consider the impact of imperfect competition. Using data on the UK refrigerator market (2002-2007), we find that the average energy consumption of appliances sold during this period was only 7.2% higher than what would have been observed under a scenario with a perfectly competitive market and non-myopic consumers. One reason for this small gap is that market power actually reduces energy use.

Keywords: Energy Efficiency; Electricity Prices; Consumer Myopia; Imperfect Competition (search for similar items in EconPapers)
JEL-codes: D12 L68 Q41 (search for similar items in EconPapers)
Date: 2017-04-01
New Economics Papers: this item is included in nep-com, nep-ene and nep-reg
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Citations: View citations in EconPapers (24)

Published in European Economic Review, 1, April, 2017, 93, pp. 1-23. ISSN: 0014-2921

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http://eprints.lse.ac.uk/69188/ Open access version. (application/pdf)

Related works:
Journal Article: Consumer myopia, imperfect competition and the energy efficiency gap: Evidence from the UK refrigerator market (2017)
Working Paper: Consumer myopia, imperfect competition and the energy efficiency gap: Evidence from the UK refrigerator market (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:69188

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