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Durable goods and residential demand for energy and water: evidence from a field trial

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  • Lucas W. Davis

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 a field 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.

Suggested Citation

  • Lucas W. Davis, 2008. "Durable goods and residential demand for energy and water: evidence from a field trial," RAND Journal of Economics, RAND Corporation, vol. 39(2), pages 530-546, June.
    • Handle: RePEc:bla:randje:v:39:y:2008:i:2:p:530-546
    DOI: 10.1111/j.0741-6261.2008.00026.x
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