Energy efficiency and minimum standards: a market analysis of recent changes in appliance energy efficiency standards in the United States

Panel: 6. Appliances, product policy and ICT

This is a peer-reviewed paper.

Authors:
C. Anna Spurlock, Lawrence Berkeley National Laboratory, USA
Hung-Chia Yang, Lawrence Berkeley National Laboratory, USA
Larry Dale, Lawrence Berkeley National Laboratory, USA

Abstract

In this study, we analyzed the effect of more stringent energy efficiency standard for clothes washers on prices and quantities sold in the U.S. market. We adopted fixed-effect model analysis to rigorously examine how prices and quantities sold of different washer types were affected due to standards. The results show that while quantities sold decreased substantially for low-efficiency units, prices for low-efficiency units increased modestly. At the same time, quantities sold of higher-efficiency units rose markedly while prices for high-efficiency units declined. This analysis enables us to identify the partial consumer welfare impact of standards, including a lower-bound on the net change in consumer surplus. The preliminary results indicate that losses in consumer welfare from banned washers were outweighed by gains from high-efficiency washers. Applied to other appliances, our analysis provides useful generalizations about the impact of minimum efficiency standards on appliance price trends, market efficiency, and consumer welfare.