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Durable goods and residential demand for energy and water: evidence from a field trial

Authors


  • This article is based on my Ph.D. dissertation at the University of Wisconsin. I thank John Kennan, Maurizio Mazzocco, Gary Solon, Matthew White, the editor, and several anonymous referees as well as seminar participants at Wisconsin, Harvard, Chicago GSB, Stanford, Columbia, and Wharton for helpful comments. Thanks also to D. Tom Rizy at Oak Ridge National Laboratory for providing the records from the Bern Washer Study. This research was made possible through an NICHD Training Grant (T32 HD07014) and the Center for Demography Ecology, which receives core support from the National Institute for Child and Human Development (R24 HD 47873). Generous financial support was also provided by the Christensen Award in Empirical Economics.

Abstract

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.

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