Abstract
Author(s): Houde, Sebastien; Spurlock, C. Anna | Abstract: We revisit Hausman and Joskow (1982)'s economic rationales for appliance minimum energy efficiency standards. In addition to the four market failures they argued could justify appliance standards--energy prices below marginal social cost, consumers underestimating energy prices, consumer discount rates above social discount rates, or principal agent problems--we discuss two additional market failures that are relevant and potentially economically important in this context: market power and innovation market failures. We highlight puzzles uncovered by recent empirical results, and suggest directions future research should take to better understand the normative implications of appliance standards.
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