Discussion Paper

Does the Provision of Free Technical Information Really Influence Firm Behavior?

May 1, 1996 | Richard D. Morgenstern


Significant environmental benefits are often associated with the rapid diffusion of new energy-saving technologies. Over the past decade, the federal government, as well as electric and gas utilities, have begun to provide free technical information to potential buyers to stimulate private investment in certain technologies, particularly for retrofitting existing buildings. Yet it has not been demonstrated that this provision of technical information can truly accelerate the rate of technology diffusion. This study develops a model of firm behavior that incorporates multiple factors in the decision to retrofit high efficiency lighting technologies. Technology retrofit and the acceptance of technical information are modeled as jointly determined dichotomous variables, and their determinants are estimated using a bivariate probit specification. The principal conclusion is that information programs make a significant contribution to the diffusion of high efficiency lighting in commercial office buildings, although these programs are less important than basic price signals.