The impact of energy prices on product innovation: evidence from the UK refrigerator market

This paper uses product-level data from the UK refrigerator market to evaluate the impact of electricity prices on product innovation. Our best estimate is that a 10% increase in the electricity price reduces the average energy consumption of commercialized refrigerator models by 2%. A large share of this reduction is explained by a reduction of freezing space. We also show that the exit of energy-inefficient products contributes more to energy reduction than the launch of new energy-efficient models. These findings suggest that innovation – the development of better technologies embodied in new products - does not respond strongly to energy price variations.


Publication infos:
Geneva, The Graduate Institute of International and Development Studies, Centre for International Environmental Studies, 2017
Publication year:
2017
Number of pages:
29 p.
Collection:
CIES Working Paper ; 51



 Record created 2017-06-26, last modified 2018-01-28

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