Consumer myopia, imperfect competition and the energy efficiency gap: Evidence from the UK refrigerator market

• The empirical literature on the energy efficiency gap concentrates on demand inefficiencies in the energy-using durables markets and finds evidence that consumers underestimate future energy costs when purchasing a new appliance. We take a broader view and also consider the impact of imperfect competition. Using data on the UK refrigerator market (2002-2007), we find that the average energy consumption of appliances sold during this period was only 7.2% higher than what would have been observed under a scenario with a perfectly competitive market and non-myopic consumers. One reason for this small gap is that market power actually reduces energy use. (C) 2017 Elsevier B.V. All rights reserved.

Ämnesord

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business (hsv//eng)

Nyckelord

Energy efficiency

Electricity prices

Consumer myopia

Imperfect competition

individual discount rates

discrete-choice models

fuel-economy

product

differentiation

gasoline prices

purchase

demand

heterogeneity

standards

durables

Business & Economics

Publikations- och innehållstyp

ref (ämneskategori)

art (ämneskategori)