The weather affects air conditioner purchases to fill the energy efficiency gap

Energy efficiency improvement is often hindered by the energy efficiency gap. This paper examines the effect of short-run temperature fluctuations on the Energy Star air conditioner purchases in the United States from 2006 to 2019 using transaction-level data. Results show that the probability of purchasing an Energy Star air conditioner increases as the weekly temperature before the transaction deviates from 20-22 °C. A larger response is related to fewer cooling degree days in the previous years, higher electricity prices/income/educational levels/age/rate of owners, more common use of electricity, and stronger concern about climate change. 1 °C increase and decrease from 21 °C would lead to a reduction of total energy expenditure by 35.46 and 17.73 million dollars nationwide (0.13% and 0.06% of the annual total energy expenditure on air conditioning), respectively. Our findings have important policy implications for demand-end interventions to incorporate the potential impact of the ambient physical environment.