Environmental Economics Seminar: Managing Energy Demand with Standards and Information
Date(s): May 7, 2013, 1 - 2:30 PM
Location: Room 4128, EPA West Building, 1301 Constitution Ave., NW, Washington, DC
Contact: Carl Pasurka, 202-566-2275
Presenter: Sebastien Houde (Department of Agricultural and Resources Economics, University of Maryland)
Description: The goal of this talk is to discuss two interrelated research projects that aim to assess the welfare effects of energy policies that rely on standards and information. The first project focuses on the Energy Star certification program. Using unique micro-data on the US refrigerator market, I first show that consumers respond to certification in different ways. Some consumers appear to rely heavily on Energy Star and pay little attention to electricity costs, others are the reverse, and still others appear to be insensitive to both electricity costs and Energy Star. I then develop a structural model of demand to capture the degree of sophistication with which consumers account for the energy efficiency attribute.
The second project complements the above analysis and investigates how firms respond to minimum and voluntary energy efficiency standards. Specifically, I develop a static multi-product oligopoly model to characterize how firms will adjust energy efficiency levels and prices when subject to voluntary standards, and I estimate the model for the US refrigerator market. The model allows investigating a rich set of counterfactual scenarios and quantify the welfare effects of the Energy Star program for the US refrigerator market.