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

Gilbert Metcalf and Kevin 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: 1997-06
Note: PE EEE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published as Review of Economics and Statistics, Vol. 81, no. 3 (1999): 516-528.

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Related works:
Journal Article: Measuring The Energy Savings From Home Improvement Investments: Evidence From Monthly Billing Data (1999)
Working Paper: Measuring the Energy Savings from Home Improvements Investments: Evidence from Monthly Billing Data (1997)
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