Estimating the price premium of high energy-efficient washing-machines in Spain: A hedonic approach

Resumen

Household appliances account for a considerable proportion of residential electricity consumption, and are therefore an important focus for energy-saving efforts. Energy- efficiency labels for appliances are a key instrument in providing information on the energy-efficiency level of an appliance and promoting the purchase of the most energy-efficient ones. This paper applies the hedonic price method to estimate the price premium paid for energy efficiency in the washing machines market in Spain.We find that consumers actually pay a price premium of 11% for high energy-efficiency washing machines compared to machines with the same characteristics but lower energy efficiency. This accounts for about €67 in the average market price of washing machines in Spain. This price premium in Spain seems to have increased by more than 5% from 2012 to 2019. Our analysis also shows that other specific attributes such as brand, place sold, spin-drying performance and built-in washing machines are very important in purchasing decision-making.