INDIVIDUAL DISCOUNTING, ENERGY-CONSERVATION, AND HOUSEHOLD DEMAND FORLIGHTING

This paper analyzes household appliance purchase and energy consumptio n and conservation related to demand for lighting. The behavioral mode l is estimated using data on consumers' choices between various types of electric light bulbs with large differences in purchase costs, oper ating costs and lifetimes. The model allows the utility attached to en ergy conservation per se to vary across consumers and explicitly takes into account the random nature of the lifetimes of lamps. Due to the panel nature of the data and the differences between lifetimes of high -efficiency and low-efficiency lamps, the consumer's discount rate can be estimated without assuming that he correctly perceive the operatin g costs. The estimated annual discount rate is about 15 percent, somew hat lower than most estimates is earlier studies.