Are Consumers Attentive to Local Energy Costs? Evidence from the Appliance Market

Sebastien Houde () and Erica Myers
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Sebastien Houde: ETH Zurich, Switzerland

No 19/313, CER-ETH Economics working paper series from CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich

Abstract: We estimate whether consumers respond to local energy costs when purchasing appliances. Using a dataset from an appliance retailer, we compare demand responsiveness to a measure of energy costs that varies with local energy prices versus purchase prices. We strongly reject that consumers are unresponsive to local energy costs under a wide range of assumptions. These findings run counter to the popular wisdom, which motivates energy standards, that energy costs are a shrouded attribute. Capital investments are an important channel for electricity demand response and may explain some of the large differences between short and long run electricity price elasticities.

Keywords: inattention; shrouded attributes; energy efficiency gap; misperceptions; appliance efficiency standards (search for similar items in EconPapers)
JEL-codes: D12 D83 L15 Q41 Q50 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2019-02
New Economics Papers: this item is included in nep-ene and nep-reg
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Are consumers attentive to local energy costs? Evidence from the appliance market (2021)
Working Paper: Are Consumers Attentive to Local Energy Costs? Evidence from the Appliance Market (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:eth:wpswif:19-313

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