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# Shipments Analysis Clothes WasherWor.kshop



# --

# CLOTHES WASHER SHIPMENTS James E. McMahon, LBNL DOE Workshop, Washington, D.C. July 22, 1999 1 ,, . ,,

# Process for Developing Model
Conjoint Analysis Logit Probability ofPurchase Model Initial Model Assessment

-- Does Not Match 1980 - 1996 Shipments Revised Probability

ofPurchase Model Model Calibration

I Calibrated Probability of Purchase Model 2

# Consumer Economic Factors • Purchase expenses: $420per washer (baseline retail price,**in~luding** 

### sales tax). 

### • Operating f3Xpenses: $122 peryear

- Energy expenses: average $76 per year (including water heating and clothes drying, averaged over water heaters and clothes dryers ofdifferent fuel types)

- Water expenses: average $46 per year for combined water and wastewater rates 3

# Clothes Washer Purchasers: Market Segments • Washer owner in existing housing • Moving into new housing • Non-owner (including· laundromat user) 

## • (NEW} Extended lifetime washer

4 3/11-12/98**nA~i~inn~ +h~+** **m~'' lft~rl** **•~** ...,.,...,..,.'-"•'-'•**·~** •• •Y• 111uy**•~au** LU



# purchasing a newwasher • Replace a working washer • Replace broken washer (or repair) • Purchase for new house • Become a washer owner (i.e., leaving the laundromat) ·· • [IN EACH DECISION: Purchase New or Used] 5

# Shipment Model Flow Diagram (Regular Clothes Washer Owners)

Yes Yes**~--Buy** New Washer----l**>-----New-~--** L------Used-----**~-Repair·--+<;.** >----Regular·----1
6

# Shipments Model Flow Diagram (Extended Lifetime, New Housing, and Houses w/o washers) 

### .------No---··
k>-----New--- '-------Used-----

-+<c

# :fii't?··>-·**--------Yes-------~ ~------No·~------­** **~------** 

### No--------

# INPUTS: Washer Shipments • AHAM

- 82o/o ofwashers are obtained new

- 26% ofwashers are replaced before breakdown

- annual shipments (1980-present) 

### • Consumer Reports

- Repair rate averages 5°/o peryear for first five years.·

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# INPUTS: Washer Shipments • Consumer Fqcus Groups

- Relative importance offeatures 

### • Conjoint Analysis

- 2°/o go to laundromat after machine breaks down

- Different income groups have similar purchase preferences

- Functional form of "Likelihood of Purchase" model

- Preference for top-loading washers 9

## ~ ..c 

## = ..c 

# £ ConsumerAction Depends on Age ofWasher 1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 0 2 4 6 8 10 WasherAge 12 14 16 flJ Replace iiRepair 111 Replace Early 1§!1 Keep

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# - en c: .Q "E: 

# -**~** c:**~** a. :.c Cf) m ::J c: c: <( 9.00 8.00 7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00 1980 

## OUTPUT: Washer Shipments (No new standards)

Units in New Housing 1990 2000 2010 2020 Year 2030 11,..**~** 

## = = = < 16 14 12 10

8 6 4

.. . ... ... 

## Output is within 

## So/o ofActual 

## Washer Shipments (1980-1996) + HistoricalData

____ StatedPreference Coefficients

_______ .Revise Probability ofPurchase Model

__Calibrate to 1980-96 Shipments t.. I \ I \ I \ I ' I \ I \ I \ I \ I \ I \ I \ I \ I ·\ J

.. .....-- ..... ·.

- •- ,,t!.. • --------- "

.. ... -.. 1985 -- .. - ; .**~** • . .,.,.*'

1990 Year 1995 \ \ \

2000 12

# Consumers' Reactions to New Standards • Higher equipment prices mean:

- fewer early replacements

- more repairs/fewer replacements

- more purchases qf used washers 

### • Lower**oper~ting** 

### expenses mitigate the reactions to higher equipment prices. • At higher standard levels, preference for top loading amplifies reactions to higher • 

### price 139 8**~7** 

### =**~ ·~**  

# - = 6 e .._, "1 5 

# - =**~** e**.~** 4 

### -= rL). 

# - 3**~** 

### = 

### = = 2 < 1 0

1980 

## OUTPUT: Washer Shipments {With New Standards)

1985 1990 + Historical -Baseline
__._20o/o Level -.-- 25°/o Level -35%/40% Level -e- 45% Level -*-- 50°/o Level 1995 2000 2005 2010 2015 2020 2025 2030 Year 14 .

### Standards will have LESS effect, if... • Future consumers value energy and water savings more • Manufacturers act to mitigate sales decrease • Consumers shift to lower-priced models . • Early replacement programs by government or utilities are effective

### Standards will have LESS effect, if... (continued) 

### • High efficiency washers capture more market share in the baseline (no new standards) case_. • Sales ofwasher/dryer combinations dilute price • 

### increase. • Not enough used washers are available • Otherfactors besides price and operating cost cause an increase in sales

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### Standards will have MORE effect if... • Future consumers value energy and water savings less • Consumers do not adjust to front-loaders • High efficiency washers capture less market share in the baseline case.

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# Conclusions • The current clothes washer shipments model provides a very detailed picture of potential standards-induced impacts. • Assuming no mitigating actions by government or industry, standards-induced sales impacts are forecast to be

- less than 10°/o for standard levels of 25°/o or below,

- 20% to 30°/o in 2003 for higher standard levels. • Increased savings awareness ofconsumers, purchase of lowend models, limited availability of used washers, and early replacement and marketing programs could mitigate standardsinduced drop in. shipments. • Decreased consumer valuation of energy savings, or adverse reaction to front-loading machines could, aggravate standardsinduced drop in shipments. 18