Measuring the Energy Savings from Home Improvement Investments: Evidence from Monthly Billing Data

Gilbert Metcalf () and Kevin Allen Hassett ()

No 6074, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: An important factor driving energy policy over the past two decades has been the Energy Paradox,' the perception that consumers apply unreasonably high hurdle rates to energy saving investments. We explore one possible explanation for this apparent puzzle: that realized returns fall short of the returns promised by engineers and product manufacturers. Using a unique data set, we find that the realized return to attic insulation is statistically significant, but the median estimate (12.3 percent) is close to a discount rate for this investment implied by a CAPM analysis. We conclude that the case for the Energy Paradox is weaker than has previously been believed.

JEL-codes: E22 Q40 (search for similar items in EconPapers)
Date: Written
Note: PE EEE
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Related works:
Working Paper: Measuring the Energy Savings from Home Improvements Investments: Evidence from Monthly Billing Data (1997)
Journal Article: Measuring The Energy Savings From Home Improvement Investments: Evidence From Monthly Billing Data (1999)
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