Larry Dale

An Analysis of the Price Elasticity of Demand for Household Appliances

This report summarizes our study of the price elasticity of demand for home appliances, including refrigerators, clothes washers, and dishwashers. In the context of increasingly stringent appliance standards, we are interested in what kind of impact the increased manufacturing costs caused by higher efficiency requirements will have on appliance sales. We begin with a review of existing economics literature describing the impact of economic variables on the sale of durable goods.We then describe the market for home appliances and changes in this market over the past 20 years, performing regression analysis on the shipments of home appliances and relevant economic variables including changes to operating cost and household income. Based on our analysis, we conclude that the demand for home appliances is price inelastic.

Life-cycle cost and payback period analysis for commercial unitary air conditioners

LBNL-54244 Life-cycle Cost and Payback Period Analysis for Commercial Unitary Air Conditioners Greg Rosenquist, Katie Coughlin, Larry Dale, James McMahon, Steve Meyers Energy Analysis Department Environmental Energy Technologies Division Ernest Orlando Lawrence Berkeley National Laboratory University of California Berkeley, CA 94720 March 2004 This work was supported by the Office of Building Technologies of the U.S. Department of Energy, under Contract No. DE-AC03-76SF00098.

Rising Temps, Tides, and Wildfires: Assessing the Risk to California's Energy Infrastructure from Projected Climate Change

Climate change affects both energy demand and supply through various parameters. These parameters include warmer air and water caused by higher temperatures, changes in the flow of rivers, snowfall and ice accretion, coastal inundation, wildfires, soil conditions, cloudiness, and wind speeds. Increases in energy demand and supply loss create a combined problem for ensuring an adequate supply of fuels and electricity. Projections of these parameters, combined with those of energy demand and supply over the next century, are needed to improve our understanding of the increased vulnerability of the energy sector.

The downside risk of climate change in California’s Central Valley agricultural sector

Downscaled climate change projections for California, when translated into changes in irrigation water delivery and then into profit from agriculture in the Central Valley, show an increase in conventional measures of variability such as the variance. However, these increases are modest and mask a more pronounced increase in downside risk, defined as the probability of unfavorable outcomes of water supply or profit. This paper describes the concept of downside risk and measures it as it applies to outcomes for Central Valley agriculture projected under four climate change scenarios. We compare the effect of downside risk aversion versus conventional risk aversion or risk neutrality when assessing the impact of climate change on the profitability of Central Valley agriculture. We find that, when downside risk is considered, the assessment of losses due to climate change increases substantially.

Energy: Supply, Demand, and Impacts

Energy consumption in the Southwest United States was 12,500 trillion British thermal units (BTUs) in 2009, equal to 222 million BTUs per person (EIA 2010). Any change or disruption to the supply of energy is likely to have significant impacts. For example, a study found that electrical power blackouts and “sags” cost the United States about

The Conjunctive Use of Reservoirs and Aquifers: Tradeoffs in Electricity Generation and Water Supply

80 billion every year in lost services, industrial capacity, and gross domestic product (LaCommare and Eto 2004).

An Analysis of Droughts in the California Central Valley Surface-Groundwater-Conveyance System

Although the literature on conjunctive use of surface and groundwater is extensive few papers have analyzed the benefits of coordinating reservoir and aquifer operations. In this work we evaluate reservoir and aquifer operations under three different management schemes. We constructed a monthly non-linear programming model embedded into an annual stochastic dynamic programming model (SDP/NLP model). This model was applied to a case study of the operations of the Merced River Basin, located in the eastern San Joaquin Valley. In a first phase of this application we calibrate the model parameters to match historic operations and the historic level of reservoir-aquifer coordination. We then use the model to estimate the benefits of managing water storage under different institutional and economic scenarios. The scenarios include an electric power scenario (where the reservoir is operated to maximize hydropower benefits), a conjunctive use scenario (where reservoir and aquifer releases are jointed managed to maximize hydropower and agricultural benefits), and a non conjunctive use scenario (where the reservoir is operated independently of groundwater controls).

An Analysis of Price Determination and Markups in the Air-Conditioning and Heating Equipment Industry

A series of drought simulations were performed using the California Department of Water Resources codes and historical datasets representing a range of droughts from mild to severe for time periods lasting up to 60 years. Land use, agricultural cropping patterns, and water demand were held fixed at the 1973-2003 mean and water supply decreased by effective amounts ranging between 25 and 50 percent for the California Central Valley, representing light to severe drought types. An examination of the impacts includes four sub-basins, the Sacramento Basin, the San Joaquin Basin, the Tulare Basin, and the Eastside Drainage. Model output results suggest the greatest impacts are in the San Joaquin and Tulare Basins, regions that are heavily irrigated. Surface diversions decrease by as much as 42 percent in these regions. Stream-to-aquifer flows reversed and aquifer storage dropped. Most significant was the decline in groundwater head for the severe drought cases, where results suggest the water table is unlikely to recover within the simulation time period. However, the overall response to such droughts is not as severe as anticipated and the northern Central Valley may act as groundwater insurance to sustain California during extended dry periods.

Emissions pathways, climate change, and impacts on California

In this report we calculate the change in final consumer prices due to minimum efficiency standards, focusing on a standard economic model of the air-conditioning and heating equipment (ACHE) wholesale industry. The model examines the relationship between the marginal cost to distribute and sell equipment and the final consumer price in this industry. The model predicts that the impact of a standard on the final consumer price is conditioned by its impact on marginal distribution costs. For example, if a standard raises the marginal cost to distribute and sell equipment a small amount, the model predicts that the standard will raise the final consumer price a small amount as well. Statistical analysis suggest that standards do not increase the amount of labor needed to distribute equipment the same employees needed to sell lower efficiency equipment can sell high efficiency equipment. Labor is a large component of the total marginal cost to distribute and sell air-conditioning and heating equipment. We infer from this that standards have a relatively small impact on ACHE marginal distribution and sale costs. Thus, our model predicts that a standard will have a relatively small impact on final ACHE consumer prices. Our statistical analysis of U.S. Census Bureau wholesale revenue tends to confirm this model prediction. Generalizing, we find that the ratio of manufacturer price to final consumer price prior to a standard tends to exceed the ratio of the change in manufacturer price to the change in final consumer price resulting from a standard. The appendix expands our analysis through a typical distribution chain for commercial and residential air-conditioning and heating equipment.