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Durable Goods and Residential Demand for Energy and Water: Evidence from a Field Trial
Lucas W. Davis
The RAND Journal of Economics
Vol. 39, No. 2 (Summer, 2008), pp. 530-546
Stable URL: http://www.jstor.org/stable/25474381
Page Count: 17
You can always find the topics here!Topics: Clothing, Price elasticity, Cost estimates, Washing, Durable goods, Marginal costs, Water consumption, Housing demand, Demand, Energy efficiency
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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.
The RAND Journal of Economics © 2008 RAND Corporation