Green Energy Labelling - Green Energy and Efficiency: An Economic Perspective - page 143

Table 4 Model estimation
Coef cient

a

const 7.25951 (0.597484)

a

sdpB 0.100122 (0.0287652)

−

a

sdpC

− 0.133373 (0.035283)

b

sdpD − 0.11889 (0.0473514)

a

Spinspeed 0.000271783 (6.53098e-05)

a

height

− 0.00201544 (0.000673553)

a

width − 0.00110405 (9.26362e-05)

a

depth 0.000607877 (0.000159054)

a

capacity 0.119305 (0.00635293)

a

white

− 0.193398 (0.0143089)

a

A*** 0.0415435 (0.0127833)

R-squared 0.765241 R-squared corrected 0.757068

a Indicates signicant at 1 % signicance level
The estimated values for the variables Location, Retailer and Brand dummies can be found in
Table A2 in Appendix 2

where lprice is the log of the price, Xi is a vector that contains the independent
variables which show the attributes of the washing machines and

is an error term.
The Ordinary Least Square (OLS) method is used with robust White standard
deviations to avoid potential problems of heteroscedasticity. The main results are
shown in Table 4 .
The results show a signi

ε

cant, positive effect of class A*** labelling on price,
measured at 0.0415, which means that washing machines labelled as class A***
cost 4.15 % more than the others. For an average price of

€ 477, this means that the

monetary value of A*** labelling is 19.79.

Another variable of interest is spin drying performance, which is signi

€

cant, and
seems to have a mean difference of 10 % between classes A and B, and 13 %
between classes A and C.
This analysis can be completed by estimating the elasticities of washing
machines with class A***, and the rest with lower energy ef

ciency. The Quantity-
Based Demand System (QBDS) is used for this purpose as explained in Galarraga
et al. [ 14 ]. (See Appendix 1).
This model treats the market for appliances as divided into two sorts of goods
which are substitutes. One good, L, is the appliance with high energy ef ciency and

the other good, O, is the appliance with low energy ef ciency. Taking into account

the presence rates of each sort of appliance in the market, and the share of
expenditure that households devote to the purchase of appliances, the expenditure
shares of each good can be calculated. These shares, obtained using data from the
Instituto Nacional de Estad

stica (INE), 1 are: í

1 www.ine.es .