Durable Goods and Residential Demand for Energy and Water: Evidence from a Field Trial

Posted: 9 Jun 2011

See all articles by Lucas W. Davis

Lucas W. Davis

University of California, Berkeley - Haas School of Business; National Bureau of Economic Research (NBER)

Date Written: 2008

Abstract

This article describes a household production model in which energy-efficient durable goods cost less to operate so households may use them more. The model is estimated using household level data from afield trial in which participants received high-efficiency clothes washers free of charge. The estimation strategy exploits this quasi-random replacement of washers to derive precise estimates of the household production technology and a demand function for clothes washing. During the field trial, households increased clothes washing on average by 5.6% after receiving a high-efficiency washer, implying a price elasticity of -.06. The complete model is used to evaluate the cost-effectiveness of recent changes in minimum efficiency standards for clothes washers.

Keywords: Durable Goods, Household Production, Energy Efficiency, Climate Change

JEL Classification: D13, H23, Q25, Q41

Suggested Citation

Davis, Lucas W., Durable Goods and Residential Demand for Energy and Water: Evidence from a Field Trial (2008). RAND Journal of Economics, Vol. 39, No. 2, 2008. Available at SSRN: https://ssrn.com/abstract=1860166

Lucas W. Davis (Contact Author)

University of California, Berkeley - Haas School of Business ( email )

545 Student Services Building, #1900
2220 Piedmont Avenue
Berkeley, CA 94720
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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