Answers are grounded in this paper and cite their sources.
We develop a methodology for testing Hicks's induced innovation hypothesis by estimating a product-characteristics model of energy-using consumer durables, augmenting the hypothesis to allow for the influence of government regulations. For the products we explored, the evidence suggests that (i) the <it>rate</it> of overall innovation was independent of energy prices and regulations; (ii) the <it>direction</it> of innovation was responsive to energy price changes for some products but not for others; (iii) energy price changes induced changes in the subset of technically feasible models that were offered for sale; (iv) this responsiveness increased substantially during the period after energy-efficiency product labeling was required; and (v) nonetheless, a sizable portion of efficiency improvements were autonomous.
No takes yet. Share an insight, caveat, or question.
Newell et al. (1999) studied this question.
Synapse has enriched 10 related papers. Consider them for comparative context: