Why the light bulb is no longer a textbook example for price elasticity: Results from choice experiments and demand modeling research

摘要

An internet search for textbook examples of “price elasticity”invariably delivers the following demand equation: “thequantity of light bulbs demanded is an inverse function of theprice of light bulbs” (i.e., as the price of light bulbs rises, thequantity of light bulbs demanded falls). However, is it reallythat simple? Recent research from California suggests thatthe demand for light bulbs has become increasingly morecomplex, as new lighting technologies serving multiple applicationswith varying efficiency levels have become morereadily available due to changes in policies, standards, supplyside business models, and ultimately consumer demand. Thispaper will present the results of consumer intercept surveyscompleted with nearly 1,000 randomly selected shoppers in200 lighting retail stores. Data from these surveys formed theinputs to a series of choice experiments and demand models.Preliminary results suggest that while changes in lightbulb purchases remain largely influenced by price, there are anumber of other factors that explain customer choice – suchas, whether the light bulb was a planned or “impulse” purchase,how many light bulbs are needed at the time of purchase,what type of light bulb was used prior to the purchaseof a replacement, what task or application the light bulbs isbeing used for, and how often the light bulbs will used. Understandingand quantifying the influence of these other factorscan help inform lighting policy and program design to moreeffectively address non-price barriers.