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Promoting Sales of Energy Efficient Household Appliances: Outcomes and Cost-Effectiveness of Rebate Programs

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  • Thiess Buettner
  • Boryana Madzharova

Abstract

This study examines rebate programs aiming at the replacement of household appliances with more efficient products in terms of energy consumption. Based on a large product-level data set for several European countries, the study examines their effects on unit sales and prices. The empirical identification strategy exploits the temporary implementation of the rebates in regional segments of the EU’s common market. The results for unit sales indicate that rebates can be an effective instrument for stimulating replacements with more energy efficient appliances. While the strength of the effects on unit sales proves sensitive to program design, we find only limited evidence of intertemporal substitution. Price effects are modest, implying that the subsidies are mostly passed on to consumers. Considering actual energy savings, we find a large variation across programs and identify key factors driving cost-effectiveness.

Suggested Citation

  • Thiess Buettner & Boryana Madzharova, 2024. "Promoting Sales of Energy Efficient Household Appliances: Outcomes and Cost-Effectiveness of Rebate Programs," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 11(5), pages 1275-1310.
    • Handle: RePEc:ucp:jaerec:doi:10.1086/728610
    DOI: 10.1086/728610
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