international business research past present and future the editors of the journal of international business studies jibs always try to publish the best international business research unfortunately there will probably never be a simple response to the question what constitutes excellent international business research we might make some progress however if we first attempt to define international business research and then identify several noteworthy examples

pro environmental households and energy efficiency in spain the residential building sector is a major driver of current and future energy consumption and associated emissions which can be potentially mitigated through significant energy efficiency ee improvements in both emerging and developed countries yet there are several persistent barriers that hinder the attainment of ee improvements in this area using data from a 2008 national representative survey of spanish households this paper is interested in the determinants of ee related decisions in particular a discrete choice model empirically analyzes whether pro environmental households are more likely to invest in ee and to adopt daily energy saving habits we show that households with eco friendly behaviors are more likely to investment in well differentiated ee measures as well as to steer daily habits towards energy savings however no effects are found for households with environmental attitudes based on stated willingness to pay to protect the environment in addition to this households belonging to higher income groups and education levels are more likely to invest in ee but not to adopt energy saving habits while households with older members are less likely to invest in ee and show fewer eco friendly habits

efficient mechanisms for bilateral trading we consider bargaining problems between one buyer and one seller for a single object the seller s valuation and the buyer s valuation for the object are assumed to be independent random variables and each individual s valuation is unknown to the other we characterize the set of allocation mechanisms that are bayesian incentive compatible and individually rational and show the general impossibility of ex post efficient mechanisms without outside subsidies for a wide class of problems we show how to compute mechanisms that maximize expected total gains from trade and mechanisms that can maximize a broker s expected profit journal of economic literature classification number 026

do greens drive hummers or hybrids environmental ideology as a determinant of consumer choice this paper uses several california data sets to test for differences in consumption patterns between greens and browns a person s environmentalism is rarely observed in consumer data sets in california a community s share of green party registered voters is a viable proxy for community environmentalism environmentalists are more likely to commute by public transit purchase hybrid vehicles and consume less gasoline than non environmentalists

household electricity demand revisited respond to price changes this paper develops a model for evaluating the effects of alternative tariff designs on electricity use the model concurrently addresses several interrelated difficulties posed by nonlinear pricing heterogeneity in consumer price sensitivity and consumption aggregation over appliances and time we estimate the model using extensive data for a representative sample of 1300 california households the results imply a strikingly skewed distribution of household electricity price elasticities in the population with a small fraction of households accounting for most aggregate demand response we then estimate the aggregate and distributional consequences of recent tariff structure changes recent efforts to restructure electricity markets have renewed interest in electricity demand and pricing this interest reflects a broad desire to improve the efficiency of electricity markets and policy makers concerns over the impact of price changes on consumers how new pricing mechanisms would affect households consumption and expenditures is a matter of considerable uncertainty however this uncertainty has provoked controversy and debate in the regulatory policy arena hampering market reforms using econometric methods to assess the effects of electricity price changes presents several challenges these include the nonlinear structure of tariff schedules aggregation of metered consumption behaviour over time and appliances and the interdependence of energy use with longer term household decisions over appliance ownership and dwelling characteristics the first two issues introduce complex simultaneity problems between marginal prices and consumption the third issue imposes high data requirements information on household specific appliance holdings and residence features and creates heterogeneity in consumption responses related to the characteristics of these durable goods when the researcher s objective is to develop a model for simulating the effects of prospective tariff changes ignoring these issues will provide an incomplete assessment of demand responses and potentially misleading predictions of a new tariff s consumption and revenue consequences in this paper we estimate a model of household electricity demand that can be used

transport and low carbon fuel a study of public preferences in spain abstract transport is essential for the control of future greenhouse gas ghg emissions and thus a target for active policy intervention in the future yet social preferences for policies are likely to play an important role in this paper we first review the existing literature on preferences regarding low ghg car fuels but also covering policy instruments and strategies in this area we then present the results of a survey of spanish households aimed at measuring preferences for climate change policies we find a positive willingness to pay wtp in the form of higher car fuel prices for a policy to reduce ghg emissions through biofuels there is however significant heterogeneity in public preferences due to personal motivations accounted for via factor analysis of responses to attitudinal questions and to socio demographic variables

an empirical study on the rebound effect considering capital costs technological progress is one of the means of reducing energy usage and carbon dioxide co2 emissions however this reduction in turn leads to a reduction in the real cost of energy services per unit which results in an increase in the demand for energy services therefore a reduction in the anticipated co2 emissions caused by a technological improvement might be partially offset in response to the cost reduction previous studies have referred to this effect as the rebound effect a large amount of empirical evidence on the rebound effect exists however most of these studies assume an exogenous improvement in energy efficiency and thus capital costs that may decrease the magnitude of the rebound effect are not taken into account expressly this paper extends the scope of the research conducted by brannlund et al brannlund r ghalwash t nordstrom j 2007 increased energy efficiency and the rebound effect effects on consumption and emissions energy economics 29 1 17 in terms of two aspects i considering capital costs explicitly as additional capital costs and ii adapting an iterating procedure and estimating the rebound effect using japanese household data as a result of our empirical analysis we conclude that the rebound is approximately 27 however we also find that ignoring additional capital costs leads to an increase in the rebound effect in the case of japanese households the magnitude of the rebound effect increases to approximately 115 moreover our simulation study shows that only a one time iteration of brannlund et al brannlund r ghalwash t nordstrom j 2007 increased energy efficiency and the rebound effect effects on consumption and emissions energy economics 29 1 17 may lead to a biased result

a liquidity based model of security design we consider the problem of the design and sale of a security backed by specified assets given access to higher return investments the issuer has an incentive to raise capital by securitizing part of these assets at the time the security is issued the issuer s or underwriter s private information regarding the payoff of the security may cause illiquidity in the form of a downward sloping demand curve for the security the severity of this illiquidity depends upon the sensitivity of the value of the issued security to the issuer s private information thus the security design problem involves a tradeoff between the retention cost of holding cash flows not included in the security design and the liquidity cost of including the cash flows and making the security design more sensitive to the issuer s private information we characterize the optimal security design in several cases we also demonstrate circumstances under which standard debt is optimal and show that the riskiness of the debt is increasing in the issuer s retention costs for assets

does the energy efficiency paradox exist technological progress and uncertainty we explain why firms may choose not to undertake investments inenergy saving technologies that appear profitable from a net presentvalue perspective as future technological advances are inherentlyuncertain and investments in new technology are at least partly irreversible it may pay to postpone investments in energy savingand wait for the arrival of improved varieties this insight casts doubton the existence of so called low hanging fruits in energy saving although we do not wish to deny that organisational failures may alsobe important failure to appreciate the underlying stochasticity oftechnological progress may obscure the insight that there is value inwaiting and costs involved in terminating the option to invest theappetite for low hanging fruits will be less when these costs areincorporated in the analysis we demonstrate that the effect of thearrival rate of new technologies on the adoption lag for a rational firmis ambiguous the same holds for the effect of the expected jump inefficiency of new technologies government policies aimed at enhancingthe adoption of new technologies through stimulation of r d maytherefore be counterproductive

when is reputation bad abstract in traditional reputation models the ability to build a reputation is good for the long run player in ely j valimaki j 2003 bad reputation naj econ 4 2 http www najecon org v4 htm quart j econ 118 2003 785 814 ely and valimaki give an example in which reputation is unambiguously bad this paper characterizes a class of games in which that insight holds the key to bad reputation is that participation is optional for the short run players and that every action of the long run player that makes the short run players want to participate has a chance of being interpreted as a signal that the long run player is bad we allow a broad set of commitment types allowing many types including the stackelberg type used to prove positive results on reputation although reputation need not be bad if the probability of the stackelberg type is too high the relative probability of the stackelberg type can be high when all commitment types are unlikely

the induced innovation hypothesis and energy saving technological change 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 ine uence of government regulations for the products we explored the evidence suggests that i the rate of overall innovation was independent of energy prices and regulations ii the direction 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

normal markets market imperfections and energy efficiency abstract the conventional distinction between economic and engineering approaches to energy analysis obscures key methodological issues concerning the measurement of the costs and benefits of policies to promote the adoption of energy efficient technologies the engineering approach is in fact based upon firm economic foundations the principle of lifecycle cost minimization that arises directly from the theory of rational investment thus evidence that so called market barriers impede the adoption of cost effective energy efficient technologies implies the existence of market failures as defined in the context of microeconomic theory problems of imperfect information and bounded rationality on the part of consumers for example may lead real world outcomes to deviate from the dictates of efficient resource allocation a widely held contrary view that the engineering view lacks economic justification is based on the fallacy that markets are normally efficient

transaction costs of tradable white certificate schemes the energy efficiency commitment as case study this paper analyses the nature and scale of transaction costs tcs borne by obliged parties under a tradable white certificate twc scheme taking the first phase of the energy efficiency commitment eecl in great britain as a case study several sources of tcs were considered such as search for information persuasion of customers negotiation with business partners and measurement and verification activities information was obtained through interviews and a questionnaire distributed to obliged parties results show that the most significant sources of tcs were related to search for information persuading customers and negotiating with managing agents contractors to implement energy efficiency measures perceived high tcs related to contract negotiation and liability risks slightly reduced the low trading level the scale of tcs was estimated to be around 10 and 30 of total investments costs for the lighting and insulation segments respectively the results indicate that despite the presence and scale of tcs the eecl scheme generated energy savings that yielded net societal benefits estimated financial benefits range from 0 6 to 6 p kwh for insulation and lighting savings respectively when avoided external costs due to electricity savings are included estimated economic benefits range from 3 to 8 p kwh several lessons from the eecl can be drawn for twc schemes among others it is found that informative policy instruments to raise awareness among end users are critical if a twc scheme is to deliver cost effective energy savings in all the nature and scale of tcs under twc schemes will differ because of a number of endogenous and exogenous determinants c 2007 elsevier ltd all rights reserved less

green transition of energy systems in rural china national survey evidence of households discrete choices on water heaters abstract energy systems in rural china are experiencing a transition from traditional fossil fuels to renewables this paper aims to investigate the potential factors that influence the choices of rural residents regarding water heaters with a focus on the low carbon transition to solar water heating systems to this end a face to face questionnaire survey is undertaken with 3404 rural households randomly selected among 12 representative provinces a comprehensive set of discrete choice modelling approaches were used the empirical results show that 1 sociodemographic variables have significant effects on residents first stage choice of a water heater to buy or not to buy but few effects on the second stage decision to choose electric lpg or solar water heaters which type to buy 2 information spillover is important to facilitate the usage of water heaters particularly of solar products 3 the electricity price which is regulated at a very low rate has no apparent effect on the choice of solar water heaters 4 government subsidy has a significant effect in the first stage but no differentiated effect on the decision choice in the second stage policy and managerial implications are presented to speed up the ongoing low carbon transition of energy systems in china

energy conservation investment do consumers discount the future correctly we argue that the apparently high discount rates attributed to investors making energy conservation investments are not irrational or the result of some market failure rather they may result from an investor recognizing that many conservation investments entail substantial sunk costs in the presence of these costs and uncertainty over future conservation savings consumers should use a higher hurdle rate for investment than if there were no uncertainty simulations suggest that the hurdle rate should be about four times greater than the standard rate an implication of our model is that tax subsidies for the purchase of conservation capital are likely to be ineffective we discuss alternative policy approaches which are more likely to increase energy efficient investment namely mandatory efficiency standards and energy taxes

measuring the energy savings from home improvement investments evidence from monthly billing data an important factor driving energy policy over the past two decades has been the energy paradox the perception that consumers apply unreasonably high hurdle rates to energy saving investments we explore one possible explanation for this apparent puzzle that realized returns fall short of the returns promised by engineers and product manufacturers using a unique data set we find that the realized return to attic insulation is statistically significant but the median estimate 9 7 is almost identical to a discount rate for this investment implied by a capm analysis we conclude that the case for the energy paradox is weaker than has previously been believed

technical evidence for assessing the performance of markets affecting energy efficiency abstract this paper focuses on the empirical basis for skepticism about the effectiveness of the market mechanism in promoting cost effective energy efficiency improvements we present a framework for evaluating engineering economic evidence on the diffusion of energy efficiency improvements and then present a series of examples within this framework that provide evidence for the existence of market imperfections related to energy efficiency we conclude with a challenge to economists policy analysts and technologists to take this empirical evidence seriously and sponsor further collaborative research in this area

green hypocrisy environmental attitudes and residential space heating expenditure popular media make claims of a green hypocrisy groups which have the strongest attitude towards the environment also have the highest emissions this study examines whether environmental behaviours beliefs and attitudes are associated with space heating energy use in the uk in order to test for evidence of a green hypocrisy in the uk the largest proportion of household energy use is for space heating we find that environmental behaviours are negatively correlated with heating expenditures while environmentally friendly attitudes and perceptions are not associated with lower heating expenditure further the effect of these attitudes and behaviours does not change as income increase there seems to be little evidence of a green hypocrisy amongst the uk public with respect to space heating

reputation for quality and adverse selection abstract we analyze a dynamic market with a seller who can make a one time investment that affects the returns of tradable assets the potential buyers of the assets cannot observe the seller s investment prior to the trade or verify it in any way after the trade the market faces two types of inefficiency the ex ante inefficiency i e the seller s moral hazard problem and the ex post inefficiency i e inefficient ex post allocations due to the adverse selection problem we analyze how the observability of information by future buyers through which the seller builds a reputation affects the two types of inefficiency as well as the interplay between them

willingness to pay and price elasticities of demand for energy efficient appliances combining the hedonic approach and demand systems abstract this article proposes a combined approach for estimating willingness to pay for the attributes represented by energy efficiency labels and providing reliable price elasticities of demand own and cross for close substitutes e g those with low energy efficiency and those with higher energy efficiency this is done by using the results of the hedonic approach together with the quantity based demand system qbds model the elasticity results obtained with the latter are then compared with those simulated using the linear almost ideal demand system la aids the methodology is applied to the dishwasher market in spain it is found that 15 6 of the final price is actually paid for the energy efficiency attribute this accounts for about 80 of the average market price the elasticity results confirm that energy efficient appliances are more price elastic than regular ones

determinants of energy efficiency investments in the us this paper analyses decisions on energy efficiency ee investments by small and medium manufacturing enterprises in the us which have received assessment from the department of energy doe the results confirm the importance of payback time and investment costs as the main determining factors in deciding whether to invest in energy efficiency such investment recommendations are frequently not implemented even though they apparently entail major advantages and give rise to considerable energy savings the data show results which are compatible with a series of elementary valuation processes limited to availability of information far removed from other more academically ambitious methods such as net present value npv and the real options ro method the paper analyses the impact of the primary resource streams electricity natural gas other energy waste and others physical situation of firms in line with their geographical locations in different us states and changes over time from 1984 to 2009 ee investment decisions are analysed here using probit models whose parameters are calibrated on the basis of the information held in the industrial assessment centres iac database the results suggest various ideas to improve policies for promoting investment in ee specially the iac programme

switch off the light please energy use aging population and consumption habits abstract in parallel with worldwide population growth europe is experiencing a fast demographic shift widely studied but generally undervalued by policymakers population aging may imply smaller household sizes and more home based energy consumption which will change the energy mix consumer preference shifts and different attitudes towards environment among the generations determine additional effects study of the link between an aging population and energy demand is even more important for italy because its energy dependence is almost complete and its population is aging quickly this paper aims to assess the role of changing generational preferences in the energy expenditure trend in italy by distinguishing between a pure age effect and a cohort effect the decomposition shows significant differences in the shape of age and cohort effects thus confirming that beside an aging effect we must consider that recent generations have a higher residential energy expenditure indeed the energy culture of post war italian generations seems more linked to thermal comfort heating and air conditioning than to environmental attitudes

environmental economics climate change policy and beyond a tribute to anil markandya environmental and natural resource economics is concerned with questions about how environmental and natural resources are and should be developed and managed among the main challenges in this research area is the excessive use of the earth s atmosphere as a sink of greenhouse gas emissions anil markandya is one of the internationally outstanding researchers not only addressing theoretical aspects of environmental problems but also developing appropriate policy approaches this paper depicts the milestones of his contributions to environmental economics and gives some special attention to his more recent works

public vs private offers in the market for lemons we study the role of observability in bargaining with correlated values short run buyers sequentially submit offers to one seller when previous offers are observable bargaining is likely to end up in an impasse in contrast when offers are hidden agreement is always reached although with delay

making the implicit explicit a look inside the implicit discount rate implicit discount rates idrs are employed in energy models to capture household investment decisions yet the factors behind the idr and their respective implications for policy making usually remain blurred and fractional the proposed comprehensive framework distinguishes three broad categories of factors underlying the idr for household adoption of energy efficient technologies eets preferences notably over time risk loss debt and the environment predictable ir rational behavior bounded rationality rational inattention behavioral biases and external barriers to energy efficiency existing empirical findings suggest that the factors underlying the idrs that differ across household characteristics and technologies should be accounted for in energy models furthermore the framework allows for a fresh look at the interplay of idrs and policies we argue that a simple observation of high idrs or observing correlations between idrs and socio economic characteristics does not provide guidance for policy making since the underlying sources cannot be identified instead we propose that some of the factors underlying the idr notably external barriers can be changed through directed policy interventions whereas other factors notably preferences and predictable ir rational behavior are innate and can only be taken into account through reactive policy interventions

how much market do market based instruments create an analysis for the case of white certificates in the context of economic instruments for more energy efficiency and climate protection tradable certificates have been investigated for renewable energy and for a number of emissions in contrast tradable energy efficiency or white certificates have only lately been considered as a market based tool to foster energy efficiency as compared to standards and labelling for example theoretically there is little doubt about the advantages in practice however some fundamental problems arise critical issues are the design of an efficient artificial market for white certificates its compatibility with the european emissions trading system the identification of a suitable target group for an energy efficiency obligation and the measurement of energy savings as compared to a reference use of energy we use the theoretical framework of transaction cost economics to elaborate these issues we conclude that transaction costs and investment specificity will restrict markets for white certificates in practise long term contracts rather than spot trade will be the prevailing form of governance for energy efficiency investments

designing incentive schemes for promoting energy efficient appliances a new methodology and a case study for spain the energy efficiency gap has been high on research and policy agendas for several decades incentive schemes such as subsidies taxes and bonus malus schemes are widely used to promote energy efficient appliances most research however considers instruments in isolation and only rarely in the context of political constraints on instrument use or for alternative policy goals this paper presents a methodology for the optimal design of incentive schemes based on the minimisation of dead weight loss for different policy goals and policy restrictions the use of the methodology is illustrated by designing optimal combinations of taxes and subsidies in spain for three types of appliance dishwashers refrigerators and washing machines the optimal policies are designed subject to different policy goals such as achieving a fixed reduction in emissions or a certain increased market share for efficient appliances and for policy constraints such as budget neutrality the methodology developed here can also be used to evaluate past and current incentive schemes

exploring the role of households hurdle rates and demand elasticities in meeting danish energy savings target abstract the eu s energy efficiency directive eed sets a binding target for energy savings in eu member states the eed further requires member states to perform ex ante evaluations of energy efficiency policies implemented to achieve these savings however ex ante evaluation of energy efficiency policies is difficult as it requires detailed modelling of end users investment and energy demand behaviour this paper details the danish interact modelling approach for ex ante evaluation of energy efficiency policies directed at residential heating interact integrates the energy system model times dk into a computable general equilibrium framework the paper explores the potential for meeting denmark s eed target through a policy induced increase in households investments in energy efficiency retrofits the paper considers the effect of energy efficiency policies on households investment behaviour by applying different levels of hurdle rates on households investments in energy efficiency retrofits the paper shows that reducing the hurdle rate from 25 to 4 could meet more than a third of danish energy saving requirements for the period 2021 2030 this result includes a direct rebound effect of 31 finally the paper demonstrates that reducing the hurdle below 10 has a substantial negative impact on households disposable income making such policy less viable from a policy perspective

macroeconomic effects of efficiency policies for energy intensive industries the case of the uk climate change agreements 2000 2010 abstract this paper reports a study modeling the uk climate change agreements ccas and related energy efficiency policies for energy intensive industrial sectors bottom up estimates of the effects of these policies are introduced into the energy demand equations of a top down dynamic econometric model of the uk economy with fifty industrial sectors mdm e3 this allowed estimation of the effects of the reduced energy use for the outputs from the sectors i e the reductions in unit costs of the energy intensive industries on the demand for their outputs both in the uk and in the export markets the model is solved as a counterfactual 2000 2005 and as a projection 2005 2010 in a series of scenarios to allow estimation of the effects of the policies on inflation and growth as well as on overall energy demand and co 2 emissions the system wide final energy reductions is estimated to be 4 2 mtoe or 2 6 of total final demand for energy by 2010 including a rebound effect of 19 with negligible effects on inflation and a slight increase in economic growth through improved international competitiveness

the impact of journals and authors on international business research a citational analysis of jibs articles in this paper we use citational analysis to examine the influence of individuals and disciplines on international business research we collected citational data over the ten year period 1984 to 1993 from every issue of the journal of international business studies we found that management economics marketing and finance disciplines have had significant influence on international business research and identified researchers such as dunning porter vernon casson rugman and hofstede as having made significant contributions to international business research

evaluating the costs and benefits of appliance efficiency standards the available empirical evidence does not provide a very convincing case that mandatory appliance efficiency standards will increase economic efficiency or reduce energy consumption significantly there is a real chance that such standards could actually reduce economic efficiency and possibly lead to an increase in energy use a broader use of programs to provide consumers with better information seems to represent the most productive short run strategy consumer education would not only help to improve decisions but it will also provide time to better assess consumer behavior allow the market to reveal the technical and economic possibilities for appliance efficiency improvements and ultimately allow public policies to be based on more than guesswork 12 references

dynamic incentives of environmental regulations the effects of alternative policy instruments on technology diffusion abstract we develop a framework for comparing empirically the effects of alternative environmental policy instruments on the diffusion of new technology market based and command and control approaches can he quantitatively compared by estimating the economic penalty that firms through their actions reveal to be associated with violation of standards in the context of concerns about global climate change we empirically examine the likely effects of pigouvian taxes technology adoption subsidies and technology standards we employ state level data on the diffusion of thermal insulation in new home construction comparing the effects of energy prices insulation cost and building codes

re evaluating the role of energy efficiency standards a behavioral economics approach abstract the economic models that prescribe pigovian taxation as the first best means of reducing energy related externalities are typically based on the neoclassical model of rational consumer choice yet consumer behavior in markets for energy using durables is generally thought to be far from efficient giving rise to the concept of the energy efficiency gap this paper presents a welfare analysis of energy policies that is based on a behavioral model of temptation and self control introduced by gul and pesendorfer 23 24 we find that in the presence of temptation i pigovian taxes alone do not yield a first best outcome ii when viewed as substitutes energy efficiency standards can dominate pigovian taxes and iii a policy combining standards with a pigovian tax can yield higher social welfare than a pigovian tax alone implying that the two instruments should be viewed as complements rather than substitutes

energy intensity co2 emissions and the environmental kuznets curve the spanish case this article analyses the role of energy intensity and the relationship between co2 emissions and primary energy in order to explain the evolution of co2 emissions by unit of real gdp it also distinguishes two different meanings of co2 emissions kuznets curve hypothesis the weak and the strong sense it considers the case of spain in the period 1972 1997 as an example in which there is not any evidence supporting this hypothesis in either sense

communication energy efficiency and economic fallacies abstract the sharpening energy efficiency debate has revived claims that the apparent savings from using more efficient technologies would be largely offset by the macroeconomic response the tendency to use more energy services because they are made cheaper when energy price or availability constrains demand this is correct in more normal circumstances it may be true for efficiency changes which occur as part of general economic trends but not for policy driven measures aimed at bringing more efficient technologies into imperfect markets in such cases there will usually be real net energy savings only slightly smaller than those suggested by a simple engineering analysis and clear economic benefits

costly distortion of information in agency problems anecdotal evidence suggests that agents often spend resources distorting information transmitted to principals we present a model where costly information distortion emerges as equilibrium behavior the information structure we focus on is intermediate between and encompasses the cases of private information and public information the agent can falsify the privately observed state at some cost although the principal can design contracts that induce no falsification these may involve excessive iinformation rents falsification can be beneficial in spite of the waste of resources involved because it helps reduce information rents we examine how optimal contract and equilibrium payoffs change as the information structure ranges from private to public information

emissions pricing spillovers and public investment in environmentally friendly technologies in a second best world of below optimal pollution pricing the public return to r d may be greater than under pigouvian pricing due to excess benefits of increasing abatement or it may be lower since private actors lack the incentives to take full advantage of the new cleaner technologies this paper uses a simple model to demonstrate the interaction between environmental policies r d externalities and the social return to innovation the results indicate that strong public support for innovation in abatement technologies is only justified if at least a moderate emissions policy is in place and spillover effects are significant if emissions policy can adjust to cost changes the public role may be enhanced since private actors will prefer to avoid ratcheting social gains from innovation increase only if innovation can allow emissions to be more fully priced technology policy is more effective with fuller emissions pricing and is better viewed as a complement to than a substitute for mitigation policy

the social discount rate what discount rate should be applied to social investments it is standard to use the market interest rate thereby respecting private preferences we show that application of this revealed preference criterion rests on faith not on logic it is justified only if preferences over all choices including past choices are time invariant the conditions for this to be true are stringent under more reasonable conditions policy makers should be more patient than private citizens whose choices define the most short sighted pareto optimum

price premium for high efficiency refrigerators and calculation of price elasticities for close substitutes a methodology using hedonic pricing and demand systems this article uses the hedonic pricing method to estimate the price premium paid for the highest energy efficiency label a in the refrigerators market of the basque autonomous community spain the estimated figure is 8 9 of the final price or about 60 euro which represents one third of the energy savings that a consumer gets during the lifetime of a refrigerator with the highest energy efficiency label this figure is then combined with the linear version of the almost ideal demand system la aids to obtain own and cross price elasticities of demand the information presented here is useful for policy design and analysis the results indicate that the demand for refrigerators with the highest energy efficiency label is highly sensitive to price variations

environmental ideology and household energy conservation in beijing abstract during a period of extraordinary urban growth china s per capita carbon footprint could soar a growth in households willingness to purchase green products and to engage in voluntary restraint could help offset this pollution increase as the free market will design products to cater to this group of consumers we study whether chinese urbanites who label themselves as environmentalists consume fewer resources than the average urbanite based on a sample of beijing s micro data drawn from the household survey on energy consumption in china we document the association between a household s environmental ideology and its energy conservation behavior our findings imply that government s demand side efforts such as environmental education and persuasion may help to bring about more sustainable behaviors

academic and professional communities of discourse generating knowledge on transnational human resource management increasing global competition is changing the nature of knowledge needed for international human resource management this article assesses the publishing trends in international organizational behaviour and human resource management ob hrm and interprets their implications for conducting transnational business a review of over 28 000 articles in seventy three academic and professional journals identified three important trends in international ob hrm first the focus has shifted from single country and comparative research to studies on international interaction second culture s impact on managerial behaviour has become well recognized and third the community of discourse uniting academics and professionals leads in generating knowledge relevant to transnational firms the first two trends bode well for the relevance of international management research to practising managers the third trend delineates the domain in which the majority of rigorous and relevant research is published and therefore the domain in which knowledge is advancing most rapidly

the real time price elasticity of electricity the real time price elasticity of electricity contains important information on the demand response of consumers to the volatility of peak prices despite the importance empirical estimates of the real time elasticity are hardly available this paper provides a quantification of the real time relationship between total peak demand and spot market prices we find a low value for the real time price elasticity which may partly be explained from the fact that not all users observe the spot market price if we correct for this phenomenon we find the elasticity to be fairly low for consumers currently active in the spot market if this conclusion applies to all users this would imply a limited scope for government intervention in supply security issues

cold houses in warm climates and vice versa a paradox of rational heating houses in cold climates are kept warmer in winter than those in warm climates des pite the greater cost of heating in colder climates it is shown that this is not only consistent with but also implied by rationality the contrary intuition is based on a confusion between average and ma rginal cost the same analysis implies that it is rational to keep th e thermostat setting constant throughout the heating season rather th an changing it with changes in external temperature copyright 1987 by university of chicago press

energy efficiency economics and policy energy efficiency and conservation are major factors in the reduction of the environmental impact of the energy sector particularly with regard to climate change energy efficiency also contributes to reducing external dependence and vulnerabilities in the energy domain in this paper we discuss the factors that influence energy efficiency and conservation decisions and the most appropriate policies for their promotion although not all public policies seem justified we argue that specific policies for promoting energy conservation may be required preferably based on economic instruments or on the provision of information to consumers

price elasticities policy measures and actual developments in household energy consumption a bottom up analysis for the netherlands in the netherlands it seems likely that the large number of new policy measures in the past decade has influenced the response of households to changing prices to investigate this issue the energy trends in the period 1990 2000 have been simulated with a bottom up model applied earlier for scenario studies and extensive data from surveys for a number of alternative price cases the elasticity values found are explained using the bottom up changes in energy trends one finding is that the specific set of saving options defines for a great part the price response the price effect has been analysed too in combination with the policy measures standards subsidies and energy taxes the simulation results indicate that the elasticity value could be 30 40 higher without these measures

electricity prices and consumers long term technology choices evidence from heating investments abstract this paper studies consumers s sensitivity to energy costs at the moment of making a long term energy technology investment the analysis exploits local variation in regulated electricity distribution prices that are persistent over time and therefore a good measure of long term price expectations price impacts are estimated on extensive administrative registry data of private persons acting as home builders in finland during 2006 2011 the results show that electricity prices notably influence builders choices and that electricity tax increases have induced demand for technologies based on renewable energy the results on the comprehensive set of individual level characteristics reveal that technology choices vary systematically across households current dwelling status and the education level have the strongest influence on the choice probabilities price sensitivity is found to be lower for low income households and to vary by the current dwelling status and type of building location

do increases in energy efficiency improve environmental quality and sustainability governments world wide increasingly see energy efficiency as an important aspect of sustainability however there is a debate in the literature as to whether the impact of improved energy efficiency on reducing energy use might be partially or more than wholly offset through rebound and backfire effects this paper clarifies the theoretical conditions under which such effects would occur and explores their likely significance using a computable general equilibrium cge model of the scottish economy we find that for scotland a general improvement in energy efficiency in the production sectors of the economy initially produces rebound effects that eventually grow into backfire energy use ultimately increases in response to an efficiency gain and the ratio of gdp to co2 emissions falls the economic factors underpinning rebound effects are straightforward energy efficiency improvements result in an effective cut in energy prices which produces output substitution competitiveness and income effects that stimulate energy demands however the presence of strong rebound or even backfire does not mean that efficiency enhancing policies are irrelevant rather it suggests that such policies operating alone are insufficient to generate environmental improvements the implication is that a co ordinated portfolio of energy policies is required

an analysis of significant contributions to the international business literature the growing interest in international business has been accompanied by a dramatic rise in the volume of international business research this note examines the international business publication records for both authors and academic institutions for the ten year period 1980 1989 nine separate publications were reviewed containing some 659 international business articles weighted and unweighted rankings are reported

do consumers discount the future correctly a market based valuation of residential fuel switching abstract dsm and energy efficiency options are generally evaluated using engineering oriented discounted cash flow procedures which value all cost and benefit streams using a single arbitrary discount rate usually the firm s weighted average cost of capital wacc the wacc based approach ignores financial risk and hence leads to unreliable results in a recent paper in this journal hassett and metcalf depart from this tradition they reflect financial risk by simulating the total variability of returns from energy saving investments their findings indicate that dsm projects are potentially risky suggesting that the net benefits must be discounted at significantly higher rates thus lowering their present values this paper presents a market based evaluation of a particular dsm option residential fuel switching using the capital asset pricing model capm under the capm approach a risk adjusted market based discount rate is estimated for each cost stream fuel maintenance and avoided outlays for electricity the market based results which reflect the systematic risk of each cost stream suggest that fuel switching is probably not cost effective because it is considerably more risky than indicated by a wacc based analysis this supports hassett and metcalf s conclusion that consumers who reject dsm projects are not necessarily acting irrationally

willingness to pay for energy saving measures in residential buildings this paper uses a choice experiment to evaluate the consumers willingness to pay for energy saving measures in switzerland s residential buildings these measures include air renewal ventilation systems and insulation of windows and facades two groups of respondents consisting respectively of 163 apartment tenants and 142 house owners were asked to choose between their housing status quo and each one of the several hypothetical situations with different attributes and prices the estimation method is based on a fixed effects logit model the results suggest that the benefits of the energy saving attributes are significantly valued by the consumers these benefits include both individual energy savings and environmental benefits as well as comfort benefits namely thermal comfort air quality and noise protection

economics and rational conservation policy energy analysts have long been concerned with the apparently low level of energy efficient investments and have suggested the presence of various market barriers and failures that hinder investment the concept of a barrier as defined here is some force that is working against investment in energy efficient technologies market failures on the other hand are failures of the competitive paradigm that lead to economically inefficient outcomes market barriers require no particular response on the part of government while market failures may call for some policy response

waiting for news in the market for lemons econometrica vol 80 no 4 july 2012 1433 1504 waiting for news in the market for lemons b y b rendan d aley and b rett g reen 1 we study a dynamic setting in which stochastic information news about the value of a privately informed seller s asset is gradually revealed to a market of buyers we con struct an equilibrium that involves periods of no trade or market failure the no trade period ends in one of two ways either enough good news arrives restoring confidence and markets reopen or bad news arrives making buyers more pessimistic and forcing capitulation that is a partial sell off of low value assets conditions under which the equilibrium is unique are provided we analyze welfare and efficiency as they depend on the quality of the news higher quality news can lead to more inefficient outcomes our model encompasses settings with or without a standard static adverse selection problem in a dynamic setting with sufficiently informative news reservation values arise endogenously from the option to sell in the future and the two environments have the same equilibrium structure k eywords dynamic games adverse selection information economics signaling 1 introduction c onsider an entrepreneur who is interested in selling her company due to liquidity constraints naturally she is better informed than the market about her company s fundamentals she would like to sell yet there is no reason she is forced to do so on any given day nor can she commit to delaying trade with every passing day that she retains ownership she gains or loses the day s profit and maintains the option to sell the next day if trade is in fact delayed then the market may learn about the value of the firm by observing cash flows investments customer base and so forth herein lies the key innovation of this paper we introduce an exogenous public information process news into a model of such settings we then study the implications for trading behavior efficiency and welfare we model the environment as a game played in continuous time where a risk neutral seller faces a competitive market there is common knowledge of gains from trade but the seller is privately informed about the asset s value i e her type which may be either high or low at each point in time prior to trade the seller receives offers from the market if an offer is accepted then the trade is consummated and the game ends if all offers are rejected then the seller consumes the type dependent flow payoff endowed by the asset contemporaneously information about the seller s type is publicly revealed we are grateful to a co editor and three anonymous referees for helpful comments and sug gestions we are greatly indebted to jeremy bulow michael harrison and andrzej skrzypacz for useful conversations comments and encouragement special thanks also to peter demarzo johannes horner ilan kremer jon levin paul milgrom yuliy sannikov bob wilson and sem inar participants at chicago chicago gsb duke mit kellogg nyu penn stanford olin wharton unc yale and the 7th annual duke northwestern texas io theory conference 2012 the econometric society doi 10 3982 ecta9278

unobservable investment and the hold up problem we study a two person bargaining problem in which the buyer may invest and increase his valuation of the object before bargaining we show that if all offers are made by the seller and the time between offers is small then the buyer invests efficiently and the seller extracts all of the surplus hence bargaining with frequently repeated offers remedies the hold up problem even when the agent who makes the relation specific investment has no bargaining power and contracting is not possible we consider alternative formulations with uncertain gains from trade or two sided investment

investment and screening under asymmetric endogenous information this article provides an analysis of screening contracts in a complete but imperfect information environment as opposed to the usual incomplete information bayesian environment an agent faces a hold up situation while making a cost reducing specific investment that is not observed by the principal to prevent the hold up the agent randomizes his investment strategy and the principal offers a screening contract the informational rents provided by the equilibrium contract finance the investment for a large class of cost functions the randomization is such that the marginal surplus follows a power distribution

energy tax credits and residential conservation investment evidence from panel data using panel data on individual tax returns and variation in state tax policy we measure the impact of government tax policies to encourage residential conservation investment on the probability of making these investments unlike previous work we account for unobserved heterogeneity in tastes for energy saving activities and its possible correlation with tax policy at the state level we find that controlling for unobserved heterogeneity is very important based on our preferred point estimate of the tax price coefficient a 10 percentage point change in the tax price for energy investment would lead to a 24 percent increase in the probability of making an investment

information and bargaining in the hold up problem this article incorporates an information structure with partial information into the canonical hold up problem the optimal information structure balances the tradeoff between ex ante efficiency the information rent effect and ex post efficiency the bargaining disagreement effect with one shot bargaining it occurs at an intermediate level of information asymmetry when there is repeated bargaining it is attained with perfect asymmetry asymmetric information the parameter that is frequently ignored in the literature turns out to be an important welfare instrument for the hold up problem our results therefore provide a basis for institutional design regarding the optimal control of information flow

a meta analysis of the price elasticity of gasoline demand a sur approach abstract automobile gasoline demand can be expressed as a multiplicative function of fuel efficiency mileage per car and car ownership this implies a linear relationship between the price elasticity of total fuel demand and the price elasticities of fuel efficiency mileage per car and car ownership in this meta analytical study we aim to investigate and explain the variation in empirical estimates of the price elasticity of gasoline demand a methodological novelty is that we use the linear relationship between the elasticities to develop a meta analytical estimation approach based on a seemingly unrelated regression sur model with cross equation restrictions this approach enables us to combine observations of different elasticities and thus increase our sample size furthermore it allows for a more detailed interpretation of our meta regression results the empirical results of the study demonstrate that the sur approach leads to more precise results i e lower standard errors than a standard meta analytical approach we find that with mean short run and long run price elasticities of 0 34 and 0 84 respectively the demand for gasoline is not very price sensitive both in the short and the long run the impact of a change in the gasoline price on demand is mainly driven by responses in fuel efficiency and mileage per car and to a slightly lesser degree by changes in car ownership furthermore we find that study characteristics relating to the geographic area studied the year of the study the type of data used the time horizon and the functional specification of the demand equation have a significant impact on the estimated value of the price elasticity of gasoline demand

dynamic market for lemons with endogenous quality choice by the seller we analyze a dynamic market for lemons in which the quality of the good is endogenously determined by the seller potential buyers sequentially submit offers to one seller the seller can make an investment that determines the quality of the item at the beginning of the game which is unobservable to buyers at the interim stage of the game the information and payoff structures are the same as in the market for lemons our main result is that the possibility of trade does not create any efficiency gain if i the common discounting is low and ii the static incentive constraints preclude the mutually agreeable ex ante contract under which the trade happens with probability one our result does not depend on whether the offers by buyers are private or public

environmental regulation of households an empirical review of economic and psychological factors abstract the literature on sustainable consumption and environmental regulation of household behavior is dominated by conceptual and normative approaches as a result many suggestions lack a firm empirical basis to overcome this deficiency econometric studies in three areas of environmentally relevant activities of households are reviewed residential use of energy generation of solid waste and recycling and residential use of water next to price and income elasticities attention is devoted to individual socio economic features and psychological factors such as attitudes knowledge perceptions and values potential psychological determinants and related insights are further examined by discussing a range of representative and illustrative statistical psychological studies of environmental behavior one important general finding is that there are very few empirical studies that systematically combine socio economic and psychological determinants a range of insights for environmental policy is derived and research recommendations are offered

publishing international business research a survey of leading journals this paper argues that given the proliferation of journals within which to publish international business research authors need to identify objectives for their research and develop a publishing strategy to ensure the appropriate and timely publication of their work based on archival data and a survey of journal editors this study provides information about seventy nine english language business publications to help authors develop such as strategy

ranking the international business journals this study seeks to assess and rank the relative quality of 30 international business journals using both a citation analysis and a survey approach journal rankings are presented using both approaches in addition to a composite ranking the rankings provide an objective analysis of journal quality for tenure and promotion committees for ib researchers considering journal submission options and provide the academic community with a better understanding of which international business publication outlets are the most influential in guiding research in this discipline

saving money vs investing money do energy ratings influence consumer demand for energy efficient goods abstract the article analyses economic barriers leading to the energy efficiency gap in the market for energy using products by observing several million transactions in the uk over two years the empirical exercise estimates aids models for refrigerators washing machines tvs and light bulbs results indicate that market barriers are crucial in the demand for energy efficient options and consumer response to changes in appliance prices total expenditures and energy prices depends on the possibility of behavioural adjustments in consumption in contrast with the induced innovation hypothesis current electricity prices can fail to induce innovation because of their short term impact on disposable income while consumers invest in energy efficiency when expecting electricity prices to rise in the future

the value of energy efficiency and the role of expected heating costs the german energy performance of buildings directive requires sellers on the housing market to provide detailed information on expected yearly energy consumption per square meter energy performance eps this paper uses variation in local fuel prices and climate fuel types and building ages to analyse the relationship between expected energy cost savings from energy efficient building structure and house prices in a data set of listing prices from all regions of germany results suggest that heating cost considerations are less relevant than previously thought

repeated principal agent relationships with lending and borrowing abstract it is shown optimal long term contracts are strictly better than a series of unrelated short term contracts for two reasons long term contracts allow risk to be spread over time and the agent s intertemporal choices provide information about the unobservable random variable

efficient allocations with hidden income and hidden storage we consider an environment in which individuals receive income shocks that are unobservable to others and can privately store resources we provide a simple characterization of the unique efficient allocation of consumption in cases in which the rate of return on storage is sufficiently high or alternatively in which the worst possible outcome is sufficiently dire we show that unlike in environments without unobservable storage the symmetric efficient allocation of consumption is decentralizable through a competitive asset market in which individuals trade riskfree bonds among themselves in this paper we consider an environment in which individuals have random income and can accumulate assets through a storage technology their income realizations and their asset position are private information given these informational frictions we provide a simple characterization of the unique efficient allocation of consumption in cases in which the rate of return on storage is sufficiently high or alternatively in which the worst possible outcome is sufficiently dire we show that the symmetric efficient allocation of consumption is decentralizable through a competitive asset market in which individuals trade risk free bonds among themselves there is a large prior literature which examines the characteristics of efficient risksharing in dynamic settings in the presence of private information unlike our paper this literature generally finds that efficient allocations do not coincide with the equilibrium allocations of any economy with a competitive bond market see atkeson and lucas 1992 in particular the key difference between our paper and these preceding ones is that the earlier literature assumes either that agents cannot accumulate resources over time or that if they can this accumulation is observable in contrast we assume that both agents incomes and their stored resources are private information it is this combination of assumptions that leads to our result our findings are reminiscent of allen s 1985 he considers a dynamic principalagent relationship in which the agent is risk averse and has hidden stochastic income the

an empirical analysis of energy intensity and the role of policy instruments abstract the reduction of energy intensity is important for sustainable economic growth especially in non oecd countries where energy demand growth is high understanding the impact of policies on energy intensity can help policy makers to reduce energy intensity using empirical methods and cross country data from 44 countries over the period 1990 2016 we study the determinants of energy intensity the common correlated effects mean group estimator is employed since it addresses nonstationarity cross sectional dependence and heterogeneity all three of which exist in the data both gdp per capita and economy wide energy prices are shown to be negatively associated with energy intensity the empirical results provide evidence that several policy instruments are effective in reducing energy intensity i standards and labeling ii government direct investment iii strategic planning and support iv fiscal measures taxes and v grants and subsidies the duration of the policy is more important than the mere existence of the policy in demonstrating the policy s effectiveness

a review of optimal energy policy instruments on industrial energy efficiency programs rebound effects and government policies abstract industrial energy efficiency programs ieeps are defined as one of the most popular government policies that aim to reduce energy consumption in industrial energy intensive sectors in this paper we review and classify the most important academic studies that have addressed the environmental and economic aspects of ieeps using a systematic review the classification of energy policy instruments has been developed based on an analytical approach we discuss also the outputs benefits and barriers of ieeps besides a comprehensive argument about the restrictive policies on the rebound effects made after the implementation of these programs the results disclose that china usa and sweden are the most addressed countries on ieeps and their applications in this regard incentive energy policies e g voluntary agreements and subsidies have been applied more than others in the last decade furthermore most of the reviewed studies emphasize energy price reform as an effective practical policy while a few analytical methods can be seen to help policy makers determine the optimal levels of decision variables finally according to the state of the art analysis the authors provide some novel recommendations to improve the performance of ieeps using some restrictive policies on the negative impacts of rebound effects

the devil is in the details household electricity saving behavior and the role of information abstract the purpose of this paper is to analyze swedish households willingness to increase their daily efforts to save electricity the analysis builds on a broad theoretical framework which embraces both economic and norm based motivations in explaining household behavior the paper pays particular attention to the role of information about the availability of different behavioral changes that can be undertaken at the household level the empirical results are based on a postal survey that was sent out to 1200 swedish households and the econometric analysis is carried out within a so called ordered probit framework our results indicate that costs environmental attitudes and social interactions are all important determinants of electricity saving activities within swedish households we tested the hypothesis that information about available savings measures that is presented in a more concrete and specific way is more likely to affect stated behavior than is more general information and the data collected support this notion the paper ends by discussing some implications of these results for the design of future informative policy measures in the energy efficiency field

the demand for climate protection empirical evidence from germany abstract an experiment designed to find the real demand for climate protection was conducted among a sample of the residential population in mannheim germany participants were offered the opportunity to contribute to climate protection by purchasing european union allowances which were then withdrawn from the european emissions trading scheme our experiment showed a median willingness to pay wtp of zero and a mean wtp of approximately 12 t co 2

unobserved investment endogenous quality and trade a seller can make investments that affect a tradable asset s future returns the potential buyer of the asset cannot observe the seller s investment prior to trade nor does he receive any signal of it nor can he verify it in anyway after trade despite this severe moral hazard problem this paper shows the seller will invest with positive probability in equilibrium and that trade will occur with positive probability the outcome of the game is sensitive to the distribution of bargaining power between the parties with a holdup problem existing if the buyer has the bargaining power a consequence of the holdup problem is surplus reducing distortions in investment level perhaps counterintuitively in many situations this distortion involves an increase in the expected amount invested vis a vis the situation without holdup

the energy efficiency gap what does it mean abstract as renewed attention has been given by policy makers to energy conservation issues it has frequently been asserted that an energy efficiency gap exists between actual and optimal energy use the critical questions is how to define the optimal level of energy efficiency this paper seeks to disentangle some confusing strands of argument that are frequently brought to bear on this question by identifying the major conceptual issues that determine the set of feasible answers we identify five separate and distinct notions of optimality the economists economic potential the technologists economic potential hypothetical potential the narrow social optimum and the true social optimum each of these has associated with it a corresponding definition of the energy efficiency gap our analysis demonstrates that necessary preconditions for identifying the right measure of the energy efficiency gap include understanding and disentangling market failure and non market failure explanations for the gradual diffusion of energy efficient technologies

new directions for household energy efficiency evidence from the uk the market rarely delivers energy efficiency improvements spontaneously as there is no market push consumers are not providing a pull towards energy efficiency usually because they are ignorant of or indifferent to the range on the market or the energy implications of their purchases whilst consumers are concerned about climate change and generally understand the causal role of fossil fuels they believe either that they have done everything or that one person cannot make a difference without a positive design focus from manufacturers or a clear demand from consumers no part of the market will deliver energy efficiency naturally policy has to provide the drive within the uk the opportunities to introduce policies based on higher energy prices are constrained by the impact these have on low income households this means that product policy market transformation has to be the main delivery mechanism for domestic energy efficiency in the uk the policies adopted so far in the uk and eu have been successful with existing products but have not prevented the development of new profligate equipment this limited success demonstrates the need for european policy to be more forceful and for policy to involve engagement with manufacturers about the products they are planning to introduce to motivate consumers policy should focus on carbon and incorporate feedback without these developments and considerably more activity by the european commission and member states energy efficiency will not contribute its potential to the uk target of 60 reduction in carbon dioxide emissions by 2050

membership of editorial boards and rankings of schools with international business orientation using 4 year data 1990 1994 1998 and 2002 we have provided a ranking of schools with international business ib orientation based on the membership of editorial boards of 30 leading international business journals participation on the editorial boards of quality journals is highly selective and should provide a quality indication of the schools both quality unadjusted and adjusted board membership based ranking are calculated in this study several interesting findings are worth noting first us schools play a significant leadership role among the leading ib programs second the findings of this study also show the major contribution of non us schools which confirms the importance of the global nature of the ib discipline third the top ranked schools share a number of characteristics finally the correlation among different ranking criteria can be low particularly for the top ranked schools suggesting that care should be exercised in interpreting school ranking

how international is management as business becomes more international have academic journals particularly management journals followed suit in this paper we examine the amount and type of international research in 19 top management journals from 1976 to 1980 and again from 1996 to 2000 international business studies are classified as multinational enterprise mne research and comparative research although the amount and type of international content varies by journal it appears that many management journals are increasing their international content while others are not

energy efficiency fallacies revisited abstract a number of governments including that of the uk subscribe to the belief that a national program devoted to raising energy efficiency throughout the economy provides a costless indeed profitable route to meeting international environmental obligations this is a seductive policy it constitutes the proverbial free lunch not only avoiding politically unpopular measures like outlawing taxing or rationing offending fuels or expanding non carboniferous sources of energy like nuclear power but doing so with economic benefit the author of this contribution came to doubt the validity of this solution when it was offered as a way of mitigating the effect of the opec price hikes of the 1970 maintaining that economically justified improvement in energy efficiency led to higher levels of energy consumption at the economy wide level than in the absence of any efficiency response more fundamentally he argues that there is no case for preferentially singling out energy from among all the resources available to us for efficiency maximization the least damaging policy is to determine targets enact the restrictive measures needed to curb consumption and then leave it to consumers intermediate and final to reallocate all the resources available to them to best effect subject to the new enacted constraints and any others they might be experiencing there is no reason to suppose that it is right for all the economic adjustment following a new resource constraint to take the form of improvements in the productivity of that resource alone as many others have argued any action to impose resource constraint entails an inevitable economic cost in the shape of a reduction in production and consumption possibilities there would be no free lunch in the last few years debate about the validity of these contentions has blossomed especially under the influence of writers on the western side of the atlantic in this contribution the author outlines the original arguments for questioning whether raised efficiency leads to lower consumption reports more recent developments and offers some insights as food for further thought