Green Energy Labelling - Green Energy and Efficiency: An Economic Perspective - page 144

Table 5 Own and cross elasticities of demand (washing machines)
QDBS (Income elasticity = 0.4)

Price elasticity of demand own O/O cross O/L own for ' L ' cross L/O

− 0.5 0.1000 − 1.2243 0.8243

− 0.75 0.3500 − 3.2851 2.8851

1 0.6000 5.3459 4.9459

− −

− 1.25

0.8500

− 7.4066

7.0066

− 1.5 1.1000 − 9.4674 9.0674

1.75 1.3500 11.5282 11.1282

− −

WO ¼ 0 001492 WL ¼ 0 000181 WX ¼ 0 998326

: : :

An income elasticity of 0.4 is considered, following Dale and Fujita [ 6 ], who
suggest that the income elasticity of demand for domestic appliances could be close
to 0.5, and [ 20 ], who measure it for dryers at 0.26. Additionally, it is also assumed
that the own-price elasticity for low energy-ef ciency washing machines is in the

range of 1.75. The results of the estimation are presented in Table 5 .

As can be observed, high energy-ef

0.5 to

− −

ciency washing machines are more elastic

than low-ef ciency ones. The own elasticity of demand for high energy-ef ciency

machines ranges from 1.2 to 11.5, and the impact of a one per cent change in the

− −

price of low-ef ciency

washing machines ranges from 0.82 to 11.1, depending on the assumed own-price
elasticity of demand for low energy-ef

ciency washing machines on the demand for high-ef

ciency appliances.

4.2 Refrigerators

The data cover 2209 refrigerators produced by 33 different manufacturers and sold
by 47 different brands. The variables included are shown in Table 6 below. The
percentage of fridges classed as A*** in the sample was very low (0.18 %), so thus
A** and A*** have been merged into a single High Class A.
The descriptive statistics can be observed in Table 7 . The average price of a
refrigerator is 2,467. The percentage of

refrigerators with High Class A is 6.30 and 54.94 % are white.
Table 8 shows the results of the estimation.
The results show that products carrying the AHigh label are on average 12.63 %
more expensive than those with the low class energy-ef

€ 684, but the range is wide, almost €

ciency label for refriger-

ators. For an average price of € 684, this means that the price premium of high

energy-ef ciency is € 86.39 in the case of refrigerators.