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Abstract
I derive and test predictions from the classic Mussa and Rosen
(1978) second-degree price discrimination model using data from
the United States clothes washer market. I find evidence consistent
with price discrimination in the market response to energy efficiency
policy changes. Concurrent with the effective dates of both
the new 2004 and 2007 federal minimum efficiency and ENERGY
STAR standards, within-model clothes washer prices dropped on
average. The heterogeneous pattern of price reduction across market
segments, and adjustments in the menu of products, were consistent
with predictions from the price-discrimination model, and
not with a perfectly competitive market.