Energy Efficiency Policy with Price-quality Discrimination
| dc.creator | Nauleau, Marie-Laure | |
| dc.creator | Giraudet, Louis-Gaëtan | |
| dc.creator | Quirion, Philippe | |
| dc.date | 2017-04-01T14:02:44Z | |
| dc.date.accessioned | 2026-07-09T09:07:04Z | |
| dc.description | We compare a range of energy efficiency policies in a durable good market subject to both energy-use externalities and price-quality discrimination by a monopolist. We find that the social optimum can be achieved with differentiated subsidies. With ad valorem subsidies, the subsidization of the high-end good leads the monopolist to cut the quality of the low-end good. The rates should always be decreasing in energy efficiency. With per-quality subsidies, there is no such interference and the rates can be increasing if the externality is large enough relative to the market share of low-type consumers. Stand-alone instruments only achieve second-best outcomes. A minimum quality standard may be set at the high-end of the product line if consumers are not too dissimilar, otherwise it should only target the low-end good. An energy tax should be set above the marginal external cost. Likewise, a uniform ad valorem subsidy should be set above the subsidy that would be needed to specifically internalize energy-use externalities. Lastly, if, as is often observed in practice, only the high-end good is to be incentivized, a per-quality schedule should be preferred over an ad valorem one. An ad valorem tax on the high-end good may even be preferred over an ad valorem subsidy if the externality is small enough and low-end consumers dominate the market. | |
| dc.identifier | doi:10.22004/ag.econ.202240 | |
| dc.identifier | https://ageconsearch.umn.edu/record/202240/files/NDL2015-033.pdf | |
| dc.identifier | http://ageconsearch.umn.edu/record/202240 | |
| dc.identifier.uri | http://hdl.handle.net/123456789/605841 | |
| dc.language | eng | |
| dc.publisher | ||
| dc.source | http://ageconsearch.umn.edu/record/202240 | |
| dc.title | Energy Efficiency Policy with Price-quality Discrimination | |
| dc.type | Text |