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Rebates, Loans, and Customers' Choice of Appliance Efficiency Level: Combining Stated- and Revealed-Preference Data

Kenneth E. Train and Terry Atherton

Year: 1995
Volume: Volume16
Number: Number 1
DOI: 10.5547/ISSN0195-6574-EJ-Vol16-No1-4
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Abstract:
Residential customers' choice of efficiency level for appliances, and their participation in demand-side management (DSM) programs, are examined using data on customers' stated preferences in hypothetical (i.e., conjoint-type) situations and their revealed preferences in real-world choices. The analysis provides information on customers' willingness to pay for energy savings, the importance of rebates in customers' decisions, and customers' response to DSM programs that offer loans for purchases of high-efficiency appliances. An estimated model is used to forecast the decisions of customers under: higher rebates, replacement of rebates with finance programs, offering of loans and rebates as alternative options for customers, and the elimination of DSM programs. We find that attractive loans (e.g., low interest rates, long repayment periods) are necessary to have the same effect as rebates. Programs that offer customers the option of loans or rebates are found to be far more effective than programs that offer only loans or only rebates.



The Cost of Power Outages in the Business and Public Sectors in Israel: Revealed Preference vs. Subjective Valuation

Michael Beenstock, Ephraim Goldin, and Yoel Haitovsky

Year: 1997
Volume: Volume18
Number: Number 2
DOI: 10.5547/ISSN0195-6574-EJ-Vol18-No2-3
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Abstract:
Cross-section data on investment in back-up generators and uninterruptable power supplies (UPS) are used to infer the implied cost of electricity outages in the business and public sectors in Israel. Two-limit tobit models of the demand for back-up are estimated and used to simulate the mitigated and unmitigated cost of power outages. These "revealed preference estimates of outage costs are then compared with estimates based on the method of subjective evaluation.



Willingness to Pay for Energy Conservation and Free-Ridership on Subsidization: Evidence from Germany

Peter Grosche and Colin Vance

Year: 2009
Volume: Volume 30
Number: Number 2
DOI: 10.5547/ISSN0195-6574-EJ-Vol30-No2-7
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Abstract:
Understanding the determinants of home-efficiency improvements is significant to a range of energy policy issues, including the reduction of fossil fuel use and environmental protection. This paper analyzes retrofit choices by assembling a unique data set merging a nationwide household survey from Germany with regional data on wages and construction costs. To explore the influence of both heterogeneous preferences and correlation among the utility of alternatives, we estimate conditional-, random parameters-, and error components logit models that parameterize the influence of costs, energy savings, and household-level socioeconomic attributes on the likelihood of undertaking one of 16 renovation options. We use the model coefficients to derive household-specific marginal Willingness to Pay estimates, and with these assess the extent to which free-ridership may undermine the effectiveness of recently implemented programs that subsidize the costs of retrofits.



OPEC’s Impact on Oil Price Volatility: The Role of Spare Capacity

Axel Pierru, James L. Smith, and Tamim Zamrik

Year: 2018
Volume: Volume 39
Number: Number 2
DOI: 10.5547/01956574.39.2.apie
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Abstract:
OPEC claims to hold and use spare production capacity to stabilize the crude oil market. We study the impact of that buffer on the volatility of oil prices. After estimating the stochastic process that generates shocks to demand and supply, and assessing OPEC's limited ability to accurately measure and offset those shocks, we find that OPEC's use of spare capacity has reduced price volatility, perhaps by as much as half. We also apply the principle of revealed preference to infer the implicit loss function that rationalizes OPEC's investment in spare capacity and compare it to other estimates of the cost of crude oil supply shortfalls. That comparison suggests that OPEC's buffer capacity was in line with global macroeconomic needs.





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