The weather affects air conditioner purchases to fill the energy efficiency gap

Abstract

Energy efficiency improvement is often hindered by the energy efficiency gap. This paper examines the effect of short-run temperature fluctuations on the Energy Star air conditioner purchases in the United States from 2006 to 2019 using transaction-level data. Results show that the probability of purchasing an Energy Star air conditioner increases as the weekly temperature before the transaction deviates from 20–22 °C. A larger response is related to fewer cooling degree days in the previous years, higher electricity prices/income/educational levels/age/rate of owners, more common use of electricity, and stronger concern about climate change. 1 °C increase and decrease from 21 °C would lead to a reduction of total energy expenditure by 35.46 and 17.73 million dollars nationwide (0.13% and 0.06% of the annual total energy expenditure on air conditioning), respectively. Our findings have important policy implications for demand-end interventions to incorporate the potential impact of the ambient physical environment

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