Appliance Standards: Comparing Predicted and Observed Prices

When appliance standards are revised, the Department of Energy (DOE) looks at the estimated benefits of standards relative to the estimated costs and only sets standards that it finds are cost-effective to consumers. This study compares the projected and actual costs of nine appliance and equipment efficiency standards, finding that across the nine rulemakings, DOE estimated an average increase in manufacturer’s selling price of $148. On average the actual change in price was a decrease in manufacturer’s selling price of $12. Looking at the midpoint (median) change, DOE estimated $108 across the nine rulemakings and the actual midpoint cost was an increase of only $10. All of the nine products’ actual costs were less than what DOE estimated. Looked at another way, DOE estimated that the new standards would increase product prices by an average of 35% but average actual prices did not change after adjusting for inflation. Several alternative analysis approaches were also used and found similar results.

via ACEEE | Appliance Standards: Comparing Predicted and Observed Prices.

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