Are Consumers Attentive to Local Energy Costs? Evidence from the Appliance Market / Sébastien Houde, Erica Myers.

Format:

Book

Author/Creator:

Houde, Sébastien.

Contributor:

National Bureau of Economic Research.

Myers, Erica.

Series:

Working Paper Series (National Bureau of Economic Research) no. w25591.

NBER working paper series no. w25591

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2019.

Summary:

We estimate whether consumers respond to local energy costs when purchasing appliances. Using a dataset from an appliance retailer, we compare demand responsiveness to a measure of energy costs that varies with local energy prices versus purchase prices. We strongly reject that consumers are unresponsive to local energy costs under a wide range of assumptions. These findings run counter to the popular wisdom, which motivates energy standards, that energy costs are a shrouded attribute. Capital investments are an important channel for electricity demand response and may explain some of the large differences between short and long run electricity price elasticities.

Notes:

Print version record

February 2019.