Journal
ENERGY ECONOMICS
Volume 33, Issue -, Pages S66-S74Publisher
ELSEVIER
DOI: 10.1016/j.eneco.2011.07.028
Keywords
Demand systems; Hedonic method; Energy efficiency labelling; Household appliances (dishwashers)
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This article proposes a combined approach for estimating willingness to pay for the attributes represented by energy efficiency labels and providing reliable price elasticities of demand (own and cross) for close substitutes (e.g. those with low energy efficiency and those with higher energy efficiency). This is done by using the results of the hedonic approach together with the Quantity Based Demand System (QBDS) model. The elasticity results obtained with the latter are then compared with those simulated using the Linear Almost Ideal Demand System (LA/AIDS). The methodology is applied to the dishwasher market in Spain: it is found that 15.6% of the final price is actually paid for the energy efficiency attribute. This accounts for about (sic)80 of the average market price. The elasticity results confirm that energy efficient appliances are more price elastic than regular ones. (C) 2011 Elsevier B.V. All rights reserved.
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