Cash for Coolers

52 Pages Posted: 4 May 2012

See all articles by Lucas W. Davis

Lucas W. Davis

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

Alan Fuchs

World Bank Group

Paul J. Gertler

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

Date Written: May 2012

Abstract

This paper examines a large-scale appliance replacement program in Mexico that since 2009 has helped 1.5 million households replace their old refrigerators and air-conditioners with energy-efficient models. Using household-level electric billing records from the population of Mexican residential customers we find that refrigerator replacement reduces electricity consumption by an average of 11 kilowatt hours per month, about a 7% decrease. We find that air conditioning replacement, in contrast, increases electricity consumption by an average of 6 kilowatt hours per month, with larger increases during the summer. To put these results in context we present a simple conceptual framework in which energy-efficient durable goods cost less to operate, so households use them more. This behavioral response, sometimes called the "rebound" effect, is important for air-conditioners, but not important for refrigerators.

Suggested Citation

Davis, Lucas W. and Fuchs, Alan and Gertler, Paul J., Cash for Coolers (May 2012). NBER Working Paper No. w18044, Available at SSRN: https://ssrn.com/abstract=2050834

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

Alan Fuchs

World Bank Group ( email )

Paul J. Gertler

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

545 Student Services Building, #1900
2220 Piedmont Avenue
Berkeley, CA 94720
United States
510-642-1418 (Phone)
510-642-4700 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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