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Do Energy Efficiency Standards Hurt Consumers? Evidence From Household Appliance Sales
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2017
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Description:How do energy efficiency standards affect consumer welfare? We answer this question by looking at how these standards affect price and quality of major appliances sold in the US between 2001 and 2011. Using a novel index that uses the same-model price changes of appliances to disentangle price changes from perceived quality changes, we derive welfare effects as functions of changes in price and quality as energy-efficiency standards became more stringent. Contrary to common belief, we find an indication that prices declined while quality and consumer welfare increased, especially when more stringent energy efficiency standards were enforced. We also find that much of the price decline is attributed to standards-induced innovation and not from Inter-manufacturer competition. Our results and technique generate methodological insights in Accounting for quality adjustments in price indexing.
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Sea Grant Document Number:HAWAU-T-17-001
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Rights Information:Public Domain
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Compliance:Library
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