Durable goods and long-run electricity demand: Evidence from air conditioner purchase behavior

David Rapson

Journal of Environmental Economics and Management, 2014, vol. 68, issue 1, 141-160

Abstract: I estimate a dynamic structural model of demand for air conditioners, the most energy-intensive home appliance in the US. The model explores the links between demand for durable goods and expected changes in key attributes: energy efficiency and price. I incorporate expectations explicitly as a feature of the choice setting, and use parameter estimates from the model to calculate durable good demand elasticities with respect to energy efficiency, electricity price, and price of the durable itself. These estimates fill a large gap in the literature, and also shed light on consumer behavior in this setting. Results indicate that consumers are forward-looking and value the stream of future savings derived from energy efficiency.

Keywords: Dynamic discrete choice; Durable goods; Energy demand (search for similar items in EconPapers)
JEL-codes: C61 L68 Q40 Q54 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (58)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:68:y:2014:i:1:p:141-160

DOI: 10.1016/j.jeem.2014.04.003

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