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Title: Retrospective Evaluation of Appliance Price Trends

Abstract

Real prices of major appliances (refrigerators, dishwashers, heating and cooling equipment) have been falling since the late 1970s despite increases in appliance efficiency and other quality variables. This paper demonstrates that historic increases in efficiency over time, including those resulting from minimum efficiency standards, incur smaller price increases than were expected by Department of Energy (DOE) forecasts made in conjunction with standards. This effect can be explained by technological innovation, which lowers the cost of efficiency, and by market changes contributing to lower markups and economies of scale in production of higher efficiency units. We reach four principal conclusions about appliance trends and retail price setting: 1. For the past several decades, the retail price of appliances has been steadily falling while efficiency has been increasing. 2. Past retail price predictions made by DOE analyses of efficiency standards, assuming constant prices over time, have tended to overestimate retail prices. 3. The average incremental price to increase appliance efficiency has declined over time. DOE technical support documents have typically overestimated this incremental price and retail prices. 4. Changes in retail markups and economies of scale in production of more efficient appliances may have contributed to declines in prices of efficient appliances.

Authors:
; ; ; ;
Publication Date:
Research Org.:
Lawrence Berkeley National Lab. (LBNL), Berkeley, CA (United States)
Sponsoring Org.:
Environmental Energy Technologies Division
OSTI Identifier:
986500
Report Number(s):
LBNL-3838E
Journal ID: ISSN 0301-4215; ENPYAC; TRN: US201017%%368
DOE Contract Number:  
DE-AC02-05CH11231
Resource Type:
Journal Article
Journal Name:
Energy Policy
Additional Journal Information:
Journal Name: Energy Policy; Journal ID: ISSN 0301-4215
Country of Publication:
United States
Language:
English
Subject:
32; 29; APPLIANCES; DISHWASHERS; EFFICIENCY; EVALUATION; HEATING; MARKET; PRICES; PRODUCTION; REFRIGERATORS; RETAIL PRICES; appliance efficiency standards, price forecasts

Citation Formats

Dale, Larry, Antinori, Camille, McNeil, Michael, McMahon, James E, and Fujita, K Sydny. Retrospective Evaluation of Appliance Price Trends. United States: N. p., 2008. Web.
Dale, Larry, Antinori, Camille, McNeil, Michael, McMahon, James E, & Fujita, K Sydny. Retrospective Evaluation of Appliance Price Trends. United States.
Dale, Larry, Antinori, Camille, McNeil, Michael, McMahon, James E, and Fujita, K Sydny. 2008. "Retrospective Evaluation of Appliance Price Trends". United States. https://www.osti.gov/servlets/purl/986500.
@article{osti_986500,
title = {Retrospective Evaluation of Appliance Price Trends},
author = {Dale, Larry and Antinori, Camille and McNeil, Michael and McMahon, James E and Fujita, K Sydny},
abstractNote = {Real prices of major appliances (refrigerators, dishwashers, heating and cooling equipment) have been falling since the late 1970s despite increases in appliance efficiency and other quality variables. This paper demonstrates that historic increases in efficiency over time, including those resulting from minimum efficiency standards, incur smaller price increases than were expected by Department of Energy (DOE) forecasts made in conjunction with standards. This effect can be explained by technological innovation, which lowers the cost of efficiency, and by market changes contributing to lower markups and economies of scale in production of higher efficiency units. We reach four principal conclusions about appliance trends and retail price setting: 1. For the past several decades, the retail price of appliances has been steadily falling while efficiency has been increasing. 2. Past retail price predictions made by DOE analyses of efficiency standards, assuming constant prices over time, have tended to overestimate retail prices. 3. The average incremental price to increase appliance efficiency has declined over time. DOE technical support documents have typically overestimated this incremental price and retail prices. 4. Changes in retail markups and economies of scale in production of more efficient appliances may have contributed to declines in prices of efficient appliances.},
doi = {},
url = {https://www.osti.gov/biblio/986500}, journal = {Energy Policy},
issn = {0301-4215},
number = ,
volume = ,
place = {United States},
year = {Sun Jul 20 00:00:00 EDT 2008},
month = {Sun Jul 20 00:00:00 EDT 2008}
}