Energy Efficiency and Minimum Standards: a Market Analysis of Recent Changes in Appliance Energy Efficiency Standards in the United States

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The objective of this paper is to examine the effect of energy efficiency standards on prices and market shares of major household appliances in the United States. The household appliance market is analyzed using point-of-sale (POS) retail data of clothes washers and dryers from NPD Group. 1 Energy efficiency information for each clothes washer model was obtained from the Federal Trade Commission (FTC) appliance energy database. 2 Using these data, we conclude that energy efficiency standards had an overall negative impact on clothes washer price, and products with a mid-low efficiency rating experienced the greatest short run price drop following the January 2004 and 2007 new standard effective dates. In neither instance is there any evidence of an increase in prices of affected appliances. In both cases we analyse the price effects of the standard both relative to dryers as a counterfactual group. Additionally, we show that market shares for clothes washers shifted towards greater efficiency over the course of the period between 2002 and 2011.

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