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Assessing the energy-efficiency gap

Publication ,  Journal Article
Gerarden, TD; Newell, RG; Stavins, RN
Published in: Journal of Economic Literature
December 1, 2017

Energy-efficient technologies offer considerable promise for reducing the financial costs and environmental damages associated with energy use, but it has long been observed that these technologies may not be adopted by individuals and firms to the degree that might be justified, even on a purely financial basis. We survey the relevant literature on this "energy-efficiency gap" by presenting two complementary frameworks. First, we divide potential explanations for the energy-efficiency gap into three categories: market failures, behavioral explanations, and model and measurement errors. Second, we organize previous research in terms of the fundamental elements of cost-minimizing energy-efficiency decisions. This provides a decomposition that organizes thinking around four questions. First, are product offerings and pricing economically efficient? Second, are energy operating costs inefficiently priced and/or understood? Third, are product choices cost minimizing in present value terms? Fourth, do other costs inhibit more energy-efficient decisions? We synthesize academic research on these questions, with an emphasis on recent empirical findings, and offer suggestions for future research. ( JEL D24, D82, L94, L98, O33, Q41, Q48).

Duke Scholars

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Published In

Journal of Economic Literature

DOI

ISSN

0022-0515

Publication Date

December 1, 2017

Volume

55

Issue

4

Start / End Page

1486 / 1525

Related Subject Headings

  • Economics
  • 3803 Economic theory
  • 3802 Econometrics
  • 3801 Applied economics
  • 14 Economics
 

Citation

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Gerarden, T. D., Newell, R. G., & Stavins, R. N. (2017). Assessing the energy-efficiency gap. Journal of Economic Literature, 55(4), 1486–1525. https://doi.org/10.1257/jel.20161360
Gerarden, T. D., R. G. Newell, and R. N. Stavins. “Assessing the energy-efficiency gap.” Journal of Economic Literature 55, no. 4 (December 1, 2017): 1486–1525. https://doi.org/10.1257/jel.20161360.
Gerarden TD, Newell RG, Stavins RN. Assessing the energy-efficiency gap. Journal of Economic Literature. 2017 Dec 1;55(4):1486–525.
Gerarden, T. D., et al. “Assessing the energy-efficiency gap.” Journal of Economic Literature, vol. 55, no. 4, Dec. 2017, pp. 1486–525. Scopus, doi:10.1257/jel.20161360.
Gerarden TD, Newell RG, Stavins RN. Assessing the energy-efficiency gap. Journal of Economic Literature. 2017 Dec 1;55(4):1486–1525.

Published In

Journal of Economic Literature

DOI

ISSN

0022-0515

Publication Date

December 1, 2017

Volume

55

Issue

4

Start / End Page

1486 / 1525

Related Subject Headings

  • Economics
  • 3803 Economic theory
  • 3802 Econometrics
  • 3801 Applied economics
  • 14 Economics