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Price Premium for High-Efficiency Refrigerators and Calculation of Price-Elasticities for Close-Substitutes: Combining Hedonic Pricing and Demand Systems
The research uses hedonic pricing to determine that A+ refrigerators in the Basque Autonomous Community carry a price premium of 8.9% (approximately 60 euro), which is only one-third of the potential lifetime energy savings. By combining this with a Linear Almost Ideal Demand System (LA/AIDS), the study finds that demand for high-efficiency refrigerators is significantly more price-elastic (ranging from -0.9 to -2.1) than demand for regular refrigerators (-0.25 to -0.75).
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Document type: Research paper
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