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Open AccessJournal ArticleDOI

The Behavior of the Market for Energy Efficiency in Residential Appliances Including Heating and Cooling Equipment

H. Ruderman, +2 more
- 01 May 1987 - 
- Vol. 8, Iss: 1, pp 101-124
TLDR
In this paper, the authors investigated the effect of market behavior over time on investment in energy efficiency in appliances and found that the payback periods for investment in increasing the energy efficiency of most household appliances are two years or less.
Abstract
cooling equipment. Accurate forecasts of residential energy use require quantitative assessments of market decisions about energy efficiency. The results of our investigation of market behavior can lead to a better understanding of the barriers to investment in energy conservation. Understanding market behavior over time is a prerequisite to an evaluation of the need for and the importance of policies to promote energy efficiency. Our results are particularly important to an assessment of the desirability of such federal policies as appliance efficiency standards. To the extent that the market place is effectively influencing the purchase of energy-efficient household appliances, there is little need for federal policies to modify market forces. To the extent that the market for energy efficiency is not performing effectively, the justification for policy intervention is supported. The major finding of this study is that the payback periods for investment in increasing the energy efficiency of most household appliances are two years or less. Except for air conditioners, the discount rates corresponding to these

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Lawrence Berkeley National Laboratory
Recent Work
Title
THE BEHAVIOR OF THE MARKET FOR ENERGY EFFICIENCY IN RESIDENTIAL APPLIANCES
INCLUDING HEATING AND COOLING EQUIPMENT
Permalink
https://escholarship.org/uc/item/5fn8v39z
Authors
Ruderman, H.
Levine, M.D.
McMahon, J.E.
Publication Date
1984-09-01
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DOCUMENTS SECTIOPJ
Submitted to the RAND Journal
THE BEHAVIOR OF THE MARKET FOR ENERGY EFFICIENCY
IN RESIDENTIAL APPLIANCES INCLUDING HEATING AND
COOLING EQUIPMENT
H. Ruderman, M.D. Levine, and J.E. McMahon
APPLIED SCIENCE
DIVISION
1
LI4
Prepared for the U.S. Department of Energy under Contract DE-AC03-76SF00098

DISCLAIMER
This document was prepared as an account of work sponsored by the United States
Government. While this document is believed to contain correct information, neither the
United States Government nor any agency thereof, nor the Regents of the University of
California, nor any of their employees, makes any warranty, express or implied, or
assumes any legal responsibilitY for the accuracY, completeness1 or usefulness of any
or process disclosed, or represents that its use would not
information, apparatus product1
infringe privately owned rights. Reference herein to any specific commercial product,
process, or service by its trade name, trademark, manufacturer, or otherwise, does not
necessarily constitute or imply its
e
ndorsement, recommendation, or favoring by the
United States Government or any agency thereof, or the Regents of the University of
California. The views and opinions of authors expressed herein do not necessarily state or
reflect those of the United States Government or any agency thereof or the Regents of the
University of California.

LBL- 15304
THE BEHAVIOR OF THE MARKET FOR ENERGY EFFICIENCY IN RESIDENTIAL
APPLIANCES INCLUDING HEATING AND COOLING EQUIPMENT
Henry Ruderman, Mark D. Levine and James E. McMahon
Energy Analysis Program
Applied Science Division
Lawrence Berkeley Laboratory
Berkeley, California 94720
September 1984
This work was supported by the Assistant Secretary for Conservation and Renewable Energy, Office of
Building Energy Research and Development, Building Equipment Division of the U.S. Department of Ener-
gy under Contract Number DE-AC03-76SF000098.

ABSTRACT
This paper provides a quantitative analysis of the behavior of the market for the purchase
of energy efficiency in residential appliances including heating and cooling equipment. We
examine the historical efficiency choices during the period 1972-80 for eight consumer pro-
ducts. We characterize the behavior of the market for these products by an aggregate market
discount rate. The major finding of this study is that the overall market discount rates for
major household appliances are high (ranging from about 20 to over 800 percent). They appear
to be relatively constant, even though fuel prices escalated rapidly during this time. We con-
clude from these results that the market for energy efficiency is not performing well.

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References
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Journal ArticleDOI

Individual Discount Rates and the Purchase and Utilization of Energy-Using Durables

TL;DR: In this article, a model of individual behavior in the purchase and utilization of energy-using durables is presented, where the tradeoff between capital costs for more energy efficient appliances and operating costs for the appliances is emphasized.
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Quantitative Methods for Analysing Travel Behaviour of Individuals : Some Recent Developments

TL;DR: This paper is concerned with quantitative methods for the analysis of travel behaviour of individuals and reviews some of the recent developments in model specification, estimation, model evaluation and testing, and aggregation and forecasting.
Journal ArticleDOI

Individual Discount Rates and the Purchase and Utilization of Energy-Using Durables: Comment

TL;DR: In this article, Hausman estimated the implicit discount rate used by air conditioner buyers in the tradeoff between initial cost and energy usage, which raises questions about consumer and producer behavior and weakens certain criticisms of efficiency standards.

ORNL engineering-economic model of residential energy use

Eric Hirst, +2 more
TL;DR: In this paper, the ORNL residential energy use model was developed to simulate energy use in the residential sector from 1970 through 2000, and the model provided considerable detail on annual energy uses by fuel, end use, and housing type.
Journal ArticleDOI

Investment in energy-efficient houses: An estimate of discount rates implicit in new home construction practices☆

TL;DR: In this article, the authors used data on residential construction practices in 1975-1976, together with climatic data, construction costs and fuel costs, to calculate discount rates implicit in homeowner's decisions to invest in energy-saving measures in new homes.
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