Green Energy Labelling - Green Energy and Efficiency: An Economic Perspective - page 146

Table 9 Own and cross elasticities of demand
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 − 1.7146 1.3146

− 0.75 0.3500 − 5.0010 4.6010

1 0.6000 8.2875 7.8875

− −

Similarly, the expenditure shares obtained from the percentages of refrigerators
in the sample and the data from the INE are:

¼ ¼ ¼

WO 0 : 001262 WL 0 : 000096 WX 0 : 998643

In the case of refrigerators an income elasticity of demand of 0.4 is considered,
and an own-price elasticity of demand for low energy-ef ciency refrigerators in the

range of 1. The results can be seen in Table 9 . The QBDS imposes some

restrictions on the model that require a different range of values to be assumed.
These restrictions can be relaxed with the use of the Almost Ideal Demand Model
(AIDS) originally developed by Deaton and Muellbauer [ 7 ], as explained in [ 17 ].

0.5 to

− −

4.3 Dishwashers

The number of dishwashers in the sample is 1,034, although only 988 were found to
be suitable for the analysis. The variables used are described in Table 10 .
The percentage of dishwashers in the sample classed as A*** is only 0.39 %,
which is too low to provide good estimates. A pooled class, AHigh, is therefore
used which merges classes A** and A***.

Table 10 Variables selected and their description
Variable Description

Price (P) Measured in Euros

Location dummy (L1-L6) If this location = 1; otherwise = 0

Retailer dummy (R1-R11) If this retailer = 1; otherwise = 0

Brand dummy (B1-B39) If this brand = 1; otherwise = 0

Energy labelling dummy AHigh
(A*** + A**)

If energy labelling is A*** or A** = 1;
otherwise = 0

Acoustic power (AcPow)
Width Measured in millimetres

Depth Measured in millimetres

Number of cutleries (NCut)
Number of programmes (NProg)
Colour white dummy If white = 1; otherwise = 0