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 year:
2017
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In: Energy Economics. - Vol. 68(2017), Suppl. 1, p. 81-88
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 Record created 2018-02-23, last modified 2019-07-30

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