Individual discount rates and the purchase and utilization of energy-using durables

Journal Article · · Bell J. Econ.; (United States)

DOI:https://doi.org/10.2307/3003318· OSTI ID:6141771

Hausman, J A

A model of individual behavior in the purchase and utilization of energy-using durables is presented which emphasizes the trade-off between capital costs for more-energy-efficient appliances and operating costs for the appliances. Using data on both the purchase and utilization of room air conditioners, the model is applied to a sample of households. The utilization equation indicates a relatively low price elasticity. The purchase equation, based on a discrete-choice model, demonstrates that individuals do trade off capital costs and expected operating costs. The results also show that individuals use a discount rate of about 20 percent in making the trade-off decision and that the discount rate varies inversely with income. 9 references.

• Research Organization: Massachusetts Inst. of Technology, Cambridge
• OSTI ID: 6141771
• Journal Information: Bell J. Econ.; (United States), Journal Name: Bell J. Econ.; (United States) Vol. 10:1; ISSN BJECD
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
290200* -- Energy Planning & Policy-- Economics & Sociology
291000 -- Energy Planning & Policy-- Conservation
AIR CONDITIONERS
APPLIANCES
BEHAVIOR
COST
ECONOMETRICS
ECONOMIC ELASTICITY
ECONOMICS
EFFICIENCY
ELECTRIC APPLIANCES
ENERGY EFFICIENCY
LIFE-CYCLE COST
MARKET