Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/194115
Authors: 
Houde, Sébastien
Year of Publication: 
2018
Series/Report no.: 
Economics Working Paper Series 18/292
Abstract: 
This paper shows that firms respond strategically to ENERGY STAR, a voluntary certification program for energy-efficient products. Firms offer products that bunch at the certification requirement, differentiate certified products in energy and non-energy dimensions, and charge a price premium on certified products. In the US refrigerator market, the magnitude of the price premium corresponds exactly to the average willingness to pay consumers have for certified products. This suggests that firms have the ability to extract most of the consumer surplus associated with certified products. If firms had to pay a fee to use the certification, a policy recently suggested, most of the cost should then be borne by consumers. I illustrate how such policy would impact the adoption of energy-efficient appliances.
Subjects: 
environmental certification
firm behavior
energy efficiency
imperfect competition
JEL: 
L13
L15
Q48
Q58
Persistent Identifier of the first edition: 
Document Type: 
Working Paper
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