Abstract
It is often asserted that consumers undervalue future expected electricity cost relative to purchase price when they choose among different types of refrigerators, or equivalently that they have high “implicit discount rates” for expected future electricity cost. This chapter illustrates how this can be tested by measuring how much that the consumers are willing to pay in purchasing price in exchange for reducing the future electricity cost that has a present value of one unit of CNY, using the random utility theory and standard logit model. To carry out the research, apart from establishing appropriate model, China’s cross-provincial electricity pricing policies are systematically investigated, classified, and approximated in order to get national population-weighted average electricity price to compute electricity cost. The dataset contains all the transaction information of Chinese refrigerator market in the year 2013. The empirical result indicates that consumers are indifferent between spending one more unit CNY in discounted future electricity cost and saving 4.47 unit CNY in refrigerator purchase price. This result verifies that there is considerable energy efficiency gap in China’s refrigerator market suggesting the need of using government subsidy to encourage consumption of energy-saving electronic appliances, especially in the refrigerator market.
Keywords
- Refrigerator Market
- electricityElectricity Consumption
- National Development And Reform Commission (NDRC)
- costCost
- Type Refrigerator
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.
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- 1.
The phenomenon that products with energy-conserving technologies which are apparently cost-effective cannot quickly get enough market share is called energy efficiency gap, or equivalently, energy paradox (Jaffe and Stavins 1994).
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Appendix
Appendix
1.1 Appendix 1: Refrigerator Market Dataset Sample
Brand | Code | Average price | Sales volume | Value of sales | Total | Cold-closet | Freezer | DPC | Market share |
---|---|---|---|---|---|---|---|---|---|
LG | GR M267QGL | 18163.00 | 4585.00 | 83277355.00 | 722.00 | 465.00 | 257.00 | 1.28 | 0.0010845136 |
LG | GR P247JHM | 15475.00 | 13847.00 | 214282325.00 | 637.00 | 412.00 | 255.00 | 1.48 | 0.0027905798 |
LG | GR M287QGN | 14010.00 | 497.00 | 6962970.00 | 755.00 | 495.00 | 260.00 | 1.15 | 0.0000906781 |
LG | GR C2376AZT | 12345.00 | 10750.00 | 132708750.00 | 626.00 | 406.00 | 220.00 | 1.25 | 0.0017282543 |
LG | GR P247CSP | 11914.00 | 9194.00 | 109537316.00 | 617.00 | 412.00 | 205.00 | 1.44 | 0.0014264948 |
LG | GR C267FSN | 11167.00 | 1448.00 | 16169816.00 | 722.00 | 465.00 | 257.00 | 1.28 | 0.0002105781 |
LG | GR P2275NRL | 11048.00 | 4756.00 | 52544288.00 | 516.00 | 348.00 | 168.00 | 1.17 | 0.0006842796 |
LG | GR B2376AZT | 10154.00 | 14859.00 | 150878286.00 | 626.00 | 406.00 | 220.00 | 1.25 | 0.0019648746 |
LG | GR C247JYL | 9961.00 | 13779.00 | 137252619.00 | 643.00 | 413.00 | 212.00 | 1.40 | 0.0017874287 |
LG | GR B267FSN | 9651.00 | 3313.00 | 31973763.00 | 722.00 | 465.00 | 257.00 | 1.28 | 0.0004163915 |
LG | GR P2274NFB | 9305.00 | 286.00 | 2661230.00 | 516.00 | 348.00 | 163.00 | 1.60 | 0.0000346570 |
LG | GR P2274NRB | 9219.00 | 50.00 | 460950.00 | 516.00 | 348.00 | 168.00 | 1.60 | 0.0000060029 |
LG | GR P2275NFL | 8354.00 | 66.00 | 551364.00 | 516.00 | 348.00 | 168.00 | 1.17 | 0.0000071804 |
LG | GR C2376ATT | 8134.00 | 12422.00 | 101040548.00 | 626.00 | 406.00 | 220.00 | 1.25 | 0.0013158421 |
LG | GR C2276NCE | 7709.00 | 4799.00 | 36995491.00 | 511.00 | 348.00 | 163.00 | 1.15 | 0.0004817890 |
LG | GR C227SSD | 7705.00 | 11231.00 | 86534855.00 | 554.00 | 365.00 | 189.00 | 1.30 | 0.0011269358 |
LG | GR C2275NFK | 7579.00 | 3603.00 | 27307137.00 | 511.00 | 348.00 | 163.00 | 1.15 | 0.0003556184 |
LG | GR K40DFML | 7546.00 | 14605.00 | 110209330.00 | 396.00 | 248.00 | 110.00 | 1.10 | 0.0014352464 |
LG | GR P2075TTN | 7446.00 | 7569.00 | 56358774.00 | 506.00 | 348.00 | 158.00 | 1.17 | 0.0007339553 |
1.2 Appendix 2: Residential Electricity Charging Standards
Province | Tariff pricing | Peak and Valley pricing | Peak price | Valley price | Flat price | 1st class limit | Peak hour | Valley hour | Flat hour | Time weighted average price | Population weight | Population weighted price |
---|---|---|---|---|---|---|---|---|---|---|---|---|
A nhui | Yes | Yes | 0.5953 | 0.3153 | N/A | 180 | 14 | 10 | N/A | 0.4786 | 0.044848142 | 0.021465816 |
Beijing | Yes | No (1) | 0.4883 | 0.4883 | N/A | 240 | N/A | N/A | N/A | 0.4883 | 0.015730319 | 0.007681115 |
Chongqing | Yes | No (2) | 0.5200 | 0.5200 | N/A | 200 | N/A | N/A | N/A | 0.5200 | 0.024978258 | 0.012988694 |
G ansu | Yes | Yes (triple) | 0.7590 | 0.2610 | 0.5100 | 160 | 8 | 8 | 8 | 0.5100 | 0.019203632 | 0.009793853 |
G uangdong | Yes | Yes (triple) | 1.0500 | 0.3500 | 0.7000 | 260 | 9 | 8 | 7 | 0.7146 | 0.07916478 | 0.056569833 |
G uangxi | Yes | Yes (triple) | 0.8457 | 0.2113 | 0.5283 | 190 | 6 | 8 | 10 | 0.5020 | 0.035097576 | 0.017618457 |
G uizhou | Yes | No | 0.4556 | 0.4556 | 0.4556 | 183 | N/A | N/A | N/A | 0.4556 | 0.026046135 | 0.011866619 |
F ujian | Yes | Yes | 0.5283 | 0.2983 | N/A | 200 | 12 | 12 | N/A | 0.4133 | 0.028069136 | 0.011600974 |
H ainan | Yes | No | 0.6083 | 0.6083 | 0.6083 | 195 | N/A | N/A | N/A | 0.6083 | 0.006656565 | 0.004049189 |
Hu bei | Yes | Yes (triple) | 1.0426 | 0.2780 | 0.5700 | 180 | 6 | 10 | 8 | 0.5665 | 0.043130079 | 0.024432471 |
Hunan | Yes | No (3) | 0.5345 | 0.5345 | 0.5345 | 180 | N/A | N/A | N/A | 0.5345 | 0.049764332 | 0.026599035 |
Hebei | Yes | Yes | 0.5500 | 0.3200 | N/A | 180 | 12 | 10 | N/A | 0.4083 | 0.054539208 | 0.022270177 |
He nan | Yes | Yes | 0.5539 | 0.4039 | N/A | 180 | 12 | 10 | N/A | 0.4452 | 0.070009214 | 0.031168452 |
Heilon gjiang | Yes | No | 0.5100 | 0.5100 | 0.5100 | 170 | N/A | N/A | N/A | 0.5100 | 0.028522823 | 0.01454664 |
Jiangsu | Yes | Yes | 0.5583 | 0.3583 | N/A | 230 | 13 | 11 | N/A | 0.4666 | 0.059046335 | 0.027552988 |
Jil in | Yes | Yes | 0.5620 | 0.3290 | N/A | 170 | 11 | 13 | N/A | 0.4358 | 0.02046057 | 0.008916546 |
Jia ngxi | Yes | Yes | 0.6300 | 0.4800 | N/A | 180 | 14 | 10 | N/A | 0.5675 | 0.033632388 | 0.01908638 |
Li aoning | Yes | Yes (triple) | 0.7500 | 0.2500 | 0.5000 | 180 | 8 | 7 | 9 | 0.5104 | 0.032650638 | 0.01666543 |
Neim eng | Yes | No | 0.4650 | 0.4650 | 0.4650 | 170 | N/A | N/A | N/A | 0.4650 | 0.018578882 | 0.00863918 |
Ni ngxia | Yes | Yes (triple) | 0.6280 | 0.2692 | 0.4486 | 170 | 8 | 8 | 8 | 0.4486 | 0.004864127 | 0.002182047 |
Qi nghai | Yes | No | 0.3771 | 0.3771 | 0.3771 | 150 | N/A | N/A | N/A | 0.3771 | 0.004298877 | 0.001621106 |
Sh andong | Yes | Yes | 0.5769 | 0.3769 | N/A | 210 | 14 | 10 | N/A | 0.4936 | 0.072389215 | 0.035728904 |
Sh anghai | Yes | Yes | 0.6170 | 0.3070 | N/A | 260 | 16 | 8 | N/A | 0.5137 | 0.010653033 | 0.005472108 |
Shanxi | Yes | Yes | 0.5070 | 0.2862 | N/A | 170 | 14 | 10 | N/A | 0.4150 | 0.026998135 | 0.011204226 |
Shanxi | Yes | No (4) | 0.4983 | 0.4983 | N/A | 180 | N/A | N/A | N/A | 0.4983 | 0.027994761 | 0.013949789 |
Si chuan | Yes | Yes (triple) | 0.6974 | 0.2612 | 0.5224 | 180 | 8 | 8 | 8 | 0.4937 | 0.060295836 | 0.029766044 |
Ti anjin | Yes | No | 0.4900 | 0.4900 | 0.4900 | 220 | N/A | N/A | N/A | 0.4900 | 0.00746703 | 0.003658845 |
Xinjiang | No | No (5) | 0.5203 | 0.5203 | 0.5203 | N/A | N/A | N/A | N/A | 0.5203 | 0.016838506 | 0.008761075 |
Xizang | No | No (6) | 0.6267 | 0.6267 | 0.6267 | N/A | N/A | N/A | N/A | 0.6267 | 0.002320501 | 0.001454258 |
Yu nnan | Yes | No | 0.4670 | 0.4670 | 0.4670 | 120 | N/A | N/A | N/A | 0.4670 | 0.034859576 | 0.016279422 |
Zh ejiang | Yes | Yes | 0.5680 | 0.2880 | 0.5380 | 230 | 14 | 10 | N/A | 0.4513 | 0.040891391 | 0.018455648 |
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Ren, Y., Luan, F., Zhou, H. (2018). The Energy Paradox: Evidence from Refrigerator Market in China. In: Hung, J., Chen, Y. (eds) The State of China’s State Capitalism. Palgrave Macmillan, Singapore. https://doi.org/10.1007/978-981-13-0983-0_6
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