Carpe Diem

The ‘good old days’ are now: Today’s home appliances are cheaper, better, and more energy efficient than ever before

appliances

Thanks to ongoing advances in energy-saving technologies, the chart above shows the significant increases in the energy efficiency of five common home appliances based on historical data that were just released by the Association of Home Appliance Manufacturers (AHAM) for the years 1981 to 2011. Those improvements in energy efficiency translate into significant energy cost savings for American households. According to a press release from the AHAM, US consumers could save $90 per year on average if they replaced their 10-year old refrigerator, clothes washer, and dishwasher with today’s energy efficient models. The savings from lower operating costs would be even greater when comparing today’s modern models to the appliances of 20 or 30 years ago.

The energy efficiency of appliances is measured by their “energy factors,” which are standard industry and government metrics that are used to measure an appliance’s overall energy efficiency. For example, the energy factor (EF) of a clothes dryer is defined as the number of pounds of clothes dried per kWh of power consumed. Definitions of the energy factors for other appliances can be found here.

In 1981, the energy factor of a typical home refrigerator was 5.59, and by 2011 the EF increased more than three-fold to 15.50, for a 207% improvement in energy efficiency in the last 30 years (see chart). The other four home appliances tracked by the AHAM also had significant improvements in energy efficiency since 1981 based on the increases in their EF ratings. Compared to 1981, the energy efficiency of the average room air-conditioner has increased by 46%, today’s freezer is 65% more efficient, and modern washing machines and dishwashers are more than twice as energy-efficient.

As one example of how technology has improved the energy efficiency of appliances, today’s dishwashers consume less than half the energy of the 1981 dishwasher because of technological advances in soil sensors that minimize water usage, and the increased use of stainless interiors that accelerate drying time.

If the energy efficiency of the average dishwasher more than doubled since 1981, what has happened to its price, measured by the number of hours a typical American factory worker would have to toil at the average hourly wage to earn enough income to purchase a standard model? The time-cost today is only one-third of the time-cost 30 years ago, as the comparison below shows.

In 1981, the dishwasher pictured above from a 1981 Wards Christmas catalog sold for $359.88. The average hourly manufacturing wage then was $7.42, meaning that it would have taken 48.5 hours of work at the average hourly wage for a typical factory worker to earn enough income thirty years ago to purchase the dishwasher above.

The new Frigidaire dishwasher above is currently listed on the Best Buy website for sale at $299.99. At the current average hourly wage of $19.79 for production workers, the average manufacturing worker would only have to work about 15 hours to earn enough income to buy today’s energy-efficient dishwasher, which is less than one-third of the 48.5 hour time-cost for the 1981 model.

Bottom Line: Today’s modern household appliances are not only cheaper than ever before, they are the most energy-efficient appliances in history, resulting in additional savings for consumers through lower operating costs. The average dishwasher today is not only more than twice as energy-efficient as a comparable 1981 model, but its cost today is only about 1/3 the price of the 1981 dishwasher, measured in what is ultimately most important: our time. Put those two factors together, and the average American’s dishwasher today is about six times better than the dishwasher of thirty years ago.

Stated differently, if dishwashers hadn’t fallen in price by a factor of three since 1981, and if they hadn’t improved in energy efficiency by a factor of more than two, Americans today might be paying more than $1,000 for a basic dishwasher instead of $300, and it would take more than twice as much energy to operate. Likewise, we would expect comparable large decreases in the amount of work time required to buy the other four appliances, along with significant reductions in operating costs due to their increased energy efficiency.

See a related post by Don Boudreaux, who does some time-cost comparisons of today’s appliances to those available in 1956, in response to claims by Paul Krugman and others who have described the 1950s as a period of prosperity for America’s middle-class. Don points out that today’s appliances are not only cheaper than the 1956 models, but they are also generally of a much higher quality. Put it all together and American consumers have never been better off when it comes to the standard home appliances that we all own and take for granted. Today’s appliances are cheaper, better, and more energy-efficient than ever before.

Today’s affordable and energy-efficient household appliances are part of the “miracle of manufacturing,” which continues to deliver cheaper and better goods to American consumers year after year, which translates into a higher standard of living for all Americans, especially for lower and middle-income households. If we wanted to identify a “golden era” of prosperity for middle-class America based on the affordability of common household appliances, today’s consumers are many times better off than the consumers of any past decade, including the 1950s that Krugman and others wax so nostalgic about. The “good old days” are now.

221 thoughts on “The ‘good old days’ are now: Today’s home appliances are cheaper, better, and more energy efficient than ever before

  1. A good bit of the refrigerator improvement stated with the California state energy rules, which required improvements. Manufacturers then let the engineers loose, and discovered that it did not cost more to make an energy efficient fridge. This resulted in this case in all fridges nationwide getting the improvement as there was not a cost reason to build fridges for Ca and for the rest of the country.
    So it took government to kick the executives of makers of fridges to make changes that afterwords turned out to be an economic win for all.

    • Lyle, the math doesn’t seem to add-up. For example, in the article “Energy use in buildings to get stricter” by the LA Times states:

      “The upgrades by law must be cost-efficient, and the Energy Commission estimated that the new standards will add $2,290 to the cost of a 2,200-square-foot home but will yield $6,200 in energy- related savings over 30 years.”

      If I invested $2,290 in the stock market for 30 years at 8% average annual return, I’d have over $23,000.

    • Lyle,

      You should be aware that manufacturers love these mandates, as they can then charge whatever the cost is, directly to every consumer without having to justify it.

      If it happens that there is no additional cost, so be it, but convincing customers to buy energy efficiency is no longer the manufacturer’s problem. Everyone WILL pay for it.

      The same thing happened with seat belts in autos in the ’50s. They were available as an option, but sold poorly. Once mandated, every car would have them, and every customer would pay for them. Problem solved.

      “You must buy their product” is music to manufacturers’ ears

      • That is not totally clear take the example of gasoline powered lawn equipment, if you go to Lowes or Home Depots web sites you find a lot of stuff that is not for sale in CA as the regs in CA essentially forbid 2 cycle engines (since they do burn oil by design). So it has to be that the delta cost to make the fixes is less than the cost of introducing a new stock keeping unit and having to handle the costs of that. It appears that in the case of appliances to start with at least the deltas were small enough, of course now we have the federal regs as well.

        • I’m not sure I understand your argument.

          In CA where 2 cycle engines don’t meet emission regs, more expensive 4 cycle engines are used. everyone buying one in CA must pay more. In other states a less expensive 2 cycle engine is available, as that’s what consumers prefer.

          The manufacturers are giving customers what they want, based on state law. I’m quite sure that any additional cost to manufacturers for a CA compliant lawn tool is included in the price.

          There is no fix for small 2 cycle engines to make them meet CA requirements.

          • My point was that if the cost to meet a regulation makes the product more costly than the costs of adding a product for a special area, then often manufactures do that. So the lawn equipment issue demonstrates that the costs here are higher where the costs in the fridge case to make the units more efficient are less than the cost of introducing a new model for Ca only.

  2. re: ” If I invested $2,290 in the stock market for 30 years at 8% average annual return, I’d have over $23,000.”

    if you accounted for inflation?

    • LarryG, that’s a simple future value calculation, so it would not include inflation.

      Future value = 2290(1 + .08)30

      or $23,043.48

      • @Walt – the inflation was a nit … but it’s wrong to say you can say money and get a return – without accounting for inflation.

        it may not sound like a big deal on this – but when it comes to retirement – SS provides you with an inflation-indexed annuity but most folks assume they can save without accounting for inflation.

        inflation matters in most calculations INCLUDING “opportunity costs”.

        it’s a matter of dealing with the realities.

        • Well, Larry, the interest rate accounts for inflation. Interest rates are determined by some expected inflation rate, plus a rate for riskiness of the investment. So, you can consider that number inflation adjusted (and then some).

          • Jon – it’s true. I’m not sure the 8% is a good number any more.

            but again – the question is more akin to whether you choose to not have electricity and invest the money instead.

            that’s non-nonsensical when asserted in the context
            of something that would save energy costs.

            .

          • To be frank, I haven’t read the comments. I just saw your one and just wanted to point it out.

            I have no clue what is going on here, nor do I really care.

        • Agreed, LarryG. Inflation is a huge factor – - especially on a fixed income. Personally, I am using a 4-5% discount rate to project future income needs now that I am semi-retired, which is historically low for my investments to include inflation (I am at 15.6% YTD this year).

          I do home energy audits. Here’s the monthly cost my meter reads for some of my devices that use electricity. One cent per hour, 24 hours per day, 365 days per year is $87.36 per year in electrical cost in this area. I can walk in almost any house and find a nickle-per-hour savings — that’s a quick $436.80 free money in savings.

          Appliance, Month
          TV, $17.00
          Basement modem and router, $0.20
          Basement Computer, monitor, modem, router, $5.50
          Upstairs belkin wireless router, $0.54
          Upstairs Computer, monitor, printer, clock, $5.50
          Cell phone charger, $0.02
          Laptop charger, $2.60
          Telephone corded, $0.32
          Telephone cordless, $3.80
          Fifth-Wheel Battery Charger and LP monitor, $1.50
          Bench Battery Charger, $1.90
          Back-Up sump pump charger, $0.22
          Screwdriver charger in basement, $0.11
          Refrigerator, $8.42

          • geeze Walt. you sure keep detailed records.

            how about cableTV and internet?

            I hate to say it but my cable/internet is rivaling my electricity costs….

            FYI – when we buy appliances, we do two things:

            1. – we consult Consumer Reports for feature/reliability ratings

            2. – we look closely at energy use.

            we do that for furnace/heat pump also.

          • LarryG, I should have clarified the TV is on a power strip surge protector with the cable box, DVD and VCR, and I measured power consuption for the entire power strip. So, the $17 per month includes all of that. I measure everything in the “OFF” and unplugged condition to check for vampire power loss.

            My cable TV and Internet (which includes home phone) = $135 per month. My electric and gas is $265 per month equal payment plan for budgeting purposes.

          • Walt

            I suspect that corded phone, if it’s only plugged into a wired phone outlet, runs on the phone company’s dime, not yours.

            Yes, I realize you pay for it in your phone bill, but it’s not in your electric bill.

        • LarryG,

          The LA Times article was referring to nominal and not real returns when it reported:

          “the Energy Commission estimated that the new standards will add $2,290 to the cost of a 2,200-square-foot home but will yield $6,200 in energy- related savings over 30 years.”

          So it was appropriate for Peak to offer a nominal and not real return comparison.

          • re: nominal vs real

            well , a couple of things

            1. – State Pension plans – sans any other fees and charges, over the last few years have netted about 5%, about 3 points lower than prior.

            2. – the discussion got a little lopsided when it started to sound like the choice was to have the appliance with it’s increased up front but longer term lower costs

            va… just forgoing the appliance all together and investing the money instead…. treating the expenditure for the appliance as “opportunity lost”.

            - which is a far different issue than looking at the relative energy costs of appliances – that one has used over the years and the newer versions much more cost efficient.

            It’s almost like saying that TVs have gotten better and cheaper but you’d be better off not having a TV and investing the money instead.

            at least that was what I thought I was hearing…

          • Larry G: “It’s almost like saying that TVs have gotten better and cheaper but you’d be better off not having a TV and investing the money instead.”

            What? Who made any sort of argument like that?

            It’s a very simple comparison. The Energy Commission argued that the energy efficiency requirement was cost-effective because an upfront “investment” of $2,290 would yield savings of $6,200 over 30 years. Peak correctly pointed out that the consumer would have been better off without investing in the energy efficiency improvement. As he explained, a $2,290 investment in equities would yield far, far more than $6,200 over 30 years.

            No one is arguing that we should not buy refrigerators. Rather, we’re arguing that government-mandated “improvements” are rarely cost-effective to the consumer. If such improvements were cost-effective for the consumer, the free market would have developed them independent of any government mandate.

          • ” are rarely cost-effective to the consumer. If such improvements were cost-effective for the consumer, the free market would have developed them independent of any government mandate.”

            what? this is not the only govt in the world you know.

            the argument being made here is to do what instead of what?

            if you need a dishwasher – then your options are to buy one and enjoy the lower operating costs over the life of it.

            the argument here is that it would have been “better” had the dishwasher not been as “efficient” ???

            this is a nonsensical idea.

            If you think there are dishwashers available in the world that are cheaper, better, more cost-effective because of less ‘regulation’ or mandates, then make your case with some specifics.

            otherwise, we’re into pure unadulterated libertarian “conjecture” with little or not evidence to support it.

            dishwashers – even ones without govt mandates are undoubtedly more efficient than 30 years ago because of advances that have occurred all on their own without govt mandates.

          • Larry G: “the argument here is that it would have been “better” had the dishwasher not been as “efficient” ???”

            Yes, that is the argument – if the additional cost to make the dishwasher more efficient exceeds the opportunity cost for those funds.

            Do you understand what is meant by the term “opportunity cost”? It’s really a very basic term in financial analysis. It is not a theoretical concept. Those of us who do financial analysis for a living – and those of us who make financial decisions – always consider opportunity costs.

          • what is opportunity cost if you must have a dishwasher and it is not discretionary with regard to your money?

          • “opportunity costs” seems to connote a concept that you would have a range of choices upon which to invest your money

            but if you must have a dishwasher – and the one you have is broke or you never had one – isn’t your “range of options” limited to one in terms of spending or not spending the money and at that point – you’re no longer looking at tradeoffs of what to spend the money on – just picking the dishwasher that appears to be the most cost-effective.

            Now if you had some money AND you were looking at different ways you could invest, save, or spend it and you were not in immediate need of a dishwasher then the analysis regarding opportunity costs would be more wide open.

            what am I missing?

            It just seems if you have to buy something that it rules out other uses of that money.

          • LarryG,

            Yes, it would be a three-part decision-making process: 1) dishwasher no or yes, 2) if no, where will you invest the money you would have spent on the dishwasher? 3) if yes, which dishwasher is the best value? (which might or might not mean most cost efficient). All of this assumes you have the money or can get the money to buy the dishwasher in the first place.

          • John Dewey asks: “Do you understand what is meant by the term “opportunity cost”?

            No he doesn’t, John, you are dealing with a logical void here, as these most recent comments indicate.

          • ” the new standards will add $2,290 to the cost of a 2,200-square-foot home but will yield $6,200 in energy- related savings over 30 years.”

            and the realistic alternative to this is…… what?

            what “opportunity costs” would be traded off?

          • Larry, the opportunity costs assume you have a choice of not spending to UPGRADE the energy efficiency and invest the money elsewhere where it MIGHT make more money. The energy investment is PROBABLY less risky because it is PROBABLY more guaranteed.

          • Okay. Got it Walt….

            so the scenario is that you already have a washer and you’re wondering if the cost of a new, more efficient one is worth it.

            right?

            somehow.. that strikes me as a bit of a variant of opportunity cost…but so be it.

          • Walt

            If you take a project management class, you will find yourself making better financial decisions.

            That may be true for many “you”s, but probably not for your intended audience.

            Logical thinking, better reading comprehension, and a smidgeon of economics might be more helpful first.

          • so the scenario is that you already have a washer and you’re wondering if the cost of a new, more efficient one is worth it.

            right?

            No. Wrong. The scenario is what you have already quoted above:

            the new standards will add $2,290 to the cost of a 2,200-square-foot home but will yield $6,200 in energy- related savings over 30 years.”

            and the realistic alternative to this is…… what?

            One alternative would be to NOT spend the additional $2290 to satisfy the new standards and gain the cost savings of $6200 in energy costs over 30 years, and instead invest the $2290 in an S&P portfolio for that 30 years instead.

            By spending the money on improved energy efficiency in the new home you are building or buying you have given up the opportunity to invest in stocks or take a cruise or buy expensive wine or whatever your next highest priority choice would be.

            what “opportunity costs” would be traded off?

            You give up an investment in the stock market for more energy efficient appliances.

            somehow.. that strikes me as a bit of a variant of opportunity cost…but so be it.

            Variant? What are you talking about? You have had no clue what the term meant until today, and there’s a good chance you still don’t know.

          • “You give up an investment in the stock market for more energy efficient appliances”

            The problem being that you aren’t buying more efficient appliances, you’re buying lower energy appliances. They aren’t the same thing. It’s that error that led to the government mandates in the first place.

          • Bob Smith

            The problem being that you aren’t buying more efficient appliances, you’re buying lower energy appliances. They aren’t the same thing. It’s that error that led to the government mandates in the first place.

            That’s right. While “energy efficient” is correct in context, most people don’t buy an appliance that washes things for that reason alone. Most likely buy one to get something clean – perhaps clothes or dishes.

          • ” most people don’t buy an appliance that washes things for that reason alone”

            The energy use yellow tag is used by quite a few people including CR in determining a ranking.

            Reliability is another.

            I do not quibble that much between two comparable units with similar lower energy use but I do rule out higher energy use appliances.

            you guys say the govt MANDATES but if you look at the yellow energy tags – you’ll see a wide variety of energy use across the spectrum of a class of appliances.

            so what is the govt mandating ?

            do you NOT look at the energy tag when you decide?

            you talk about opportunity cost but a unit that uses a lot of energy and/or has crummy reliability is also part of that equation.

            if you only looked at higher energy use appliances – the payback calculations would be much worse.

          • Energy ratings are meaningless without quality measures. Washers without agitators do not clean as well. Cold rinses do not eliminate soap residue as well as warm/hot. The government has decided it knows better than I on how to make these tradeoffs, as if a bureaucrat in DC is smart enough to know what’s best for everybody. Nobody is that smart, and the hubris required to think you are is stupendous.

            You should note what the bureaucrats didn’t see, which is typical of government rulemaking. If you’re only offered cold rinse cycles to meet government energy requirements for washers, you then have to use a hell of a lot more energy to dry your clothes. The laws of thermodynamics are harsh and unyielding. You’re at best net level (and very likely a net loser) in energy use across the wash/dry cycle, but you’re left with less clean clothes. Thanks a lot, government!

          • ” Energy ratings are meaningless without quality measures. Washers without agitators do not clean as well. Cold rinses do not eliminate soap residue as well as warm/hot. The government has decided it knows better than I on how to make these tradeoffs, as if a bureaucrat in DC is smart enough to know what’s best for everybody. Nobody is that smart, and the hubris required to think you are is stupendous.”

            what you say is simply not true. the govt has required disclosure and the energy ratings vary widely – as well as the quality rating in publications like CR.

            you’ve have your built-in biases here.

            front loaders are what you encounter in commercial laundry establishments… and CR says they CAN clean better.

            do you read that and ignore it or what?

            this is just more anti-govt blather.. running rampant here.

          • “what you say is simply not true. the govt has required disclosure and the energy ratings vary widely – as well as the quality rating in publications like CR.”

            The government only requires disclosure? Then why can’t I buy a new conventional toploader with agitator and full choice of hot/warm/cold rinse cycles? Oh yeah, they’re illegal because they can’t meet the government’s stupid mandatory energy standards.

            “front loaders are what you encounter in commercial laundry establishments… and CR says they CAN clean better.”

            Have you noticed the prices for said “better” front loaders? Why should I have to spend 2-3x the money just to get back to where I was before with a conventional toploader? Only an idiot, or a government bureaucrat (sorry if that’s redundant), would make that tradeoff.

          • Walt: “The energy investment is PROBABLY less risky because it is PROBABLY more guaranteed.”

            Not sure I understand that point, Walt.

            We can assume that, over the long run, utility prices vary as energy prices vary. You are basically arguing that returns for energy are less risky than the returns for the total stock market over 30 years.

            As I see it, the returns for a diversified equity portfolio are far LESS risky than the returns for the single sector, energy.

          • That might not be a great comparison, John Dewey. I can get 0.10% for my money with pretty much 100% safety (FDIC insured). I am assuming the energy “investment” is safe the same way: locked in and predictable.

            Over time, much time in some time periods, a well-diversified portfolio has historically performed very well and better than the “safe” investment. That assumes history repeats itself and you can out-wait any market downturn for your money.

          • Walt is CLEARLY demonstrating the difference between theory and practice.

            it’s just not so simple as some would have us believe.

            there are dozens of trade-offs with seat-of-the-pants assessments about things you can’t possible know the answer to because it’s in the future.

            For the average person – a relatively simple straight-forward approach will get you close enough to make a decision that suits you.

            for others that are more inclined towards pedantic maybe not so much..

          • I calculated a 3.38% compound growth rate ($2290 – $6200 in 30 years). That is about what my safe money im my 401k is making.

          • re: ” 3.38% That is about what my safe money im my 401k is making”

            and in the same range that most state pension funds are making also when they originally counted on 8%.

            trying to figure the opportunity cost over 30 years is not a simple thing… trying to do it over the last 8 years was risky business.

          • LarryG,

            I make these types of decisions every day. I could not semi-retire at 57 otherwise.

          • Walt – trying to predict the future of investment rates, energy costs, and the life cycle of hard goods is as much art as science.

            I’m sure there are people that are very good at it.

            But based on the last 10 years, it’s also clear there are a bunch of people who thought they were good – that sucked at it.

            and that would include MOST companies that managed people’s 401Ks as well as public pension funds.

          • LarryG, you make the best decisions you can based on the best information you have. I moved a big chunk of money earlier this year, and I am at 19.9% YTD with it. I’ll have a decision to make shortly about it: won’t I? You lose some, and you win some.

            Would you prefer the safety of the 3.38% or the risk of the 19.9%? for this one particular decision? Trust me, people who have money think this way.

          • The energy use yellow tag is used by quite a few people including CR in determining a ranking.

            “Reliability is another.”

            Let me try this: When a person shops for an appliance – a dishwasher maybe – they have certain attributes they look for. These are ranked in order of how important that attribute is. Price is usually right near the top of the list, but if you want to get clean dishes you will have cleaning ability right near or at the top of your ranking also. Reliability is another important attribute. Somewhere way down near the bottom of the list for most people is energy efficiency. Keep in mind that you are only comparing the *difference* in energy costs between models, not the total energy cost.

            I do not quibble that much between two comparable units with similar lower energy use but I do rule out higher energy use appliances.

            If energy usage is most important in your own ranking of desirable attributes, then you should consider an electric can opener instead of a dishwasher as they use MUCH less energy than dishwashers.

            you guys say the govt MANDATES but if you look at the yellow energy tags – you’ll see a wide variety of energy use across the spectrum of a class of appliances.

            so what is the govt mandating ?

            Government mandate low energy use limits and low water use limits. An energy use *limit*, just like a speed *limit*, means you can operate anywhere below that limit. Therefore, Larry, you will see a variety of numbers on those yellow tags, but they are all below the limit. Tax incentives and rebates are provided using your money to encourage preoccupation with energy usage instead of with cleaning efficiency

            do you NOT look at the energy tag when you decide?

            I look at energy tags after every other possible comparison has been made, including what color the appliance is. Energy usage is way down on my list of important considerations.

            you talk about opportunity cost but a unit that uses a lot of energy and/or has crummy reliability is also part of that equation.

            Reliability is an important consideration, energy use is a minor issue. The differences in the cost of running dishwashers is not a large amount. Many other considerations are more important to me.

            if you only looked at higher energy use appliances – the payback calculations would be much worse.

          • Walt

            I am assuming the energy “investment” is safe the same way: locked in and predictable.

            Am I reading that correctly? You presume to know the certainty of energy prices over the next 30 years, so you can call an ROI in an investment in energy efficient appliances a safe investment? “Locked in and predictable”? Amazing.

          • ” so you can call an ROI in an investment in energy efficient appliances a safe investment?”

            ha ha ha

            as “safe” as say “opportunity cost” of investing in the stock market?

            :-)

            the assumptions are flying left and right here…

          • I guess you would have to chart energy prices as they apply to residential consumption v. the stock market over the last 30 years and assume you could use that to forecast the future. It’s anyone’s guess, but I am adding attic insulation this year anyhow.

          • Ron,

            I used Peak’s numbers, calculated 3.38% compounded over 30 years from them, and assumed they were stable enough for the sake of comparsion to other choices. You can plug in your own values with your own probablities and do your own calculations.

  3. ye GODS the “opportunity POLICE”!

    there are TWO issues here:

    1. the first is inflation

    2. – the second is the assumption that the trade-off is between spending 2290 or spending MORE than that in 30 years of operational costs.

    When it comes to energy costs – you have to compare – not what you’d save if you spend nothing on energy but what you’d spend to pay for energy needed and consumed.

    the “opportunity” cost that assumes that you’d not use energy at all.. is less than real.

    • 2. – the second is the assumption that the trade-off is between spending 2290 or spending MORE than that in 30 years of operational costs.

      When it comes to energy costs – you have to compare – not what you’d save if you spend nothing on energy but what you’d spend to pay for energy needed and consumed.

      the “opportunity” cost that assumes that you’d not use energy at all.. is less than real.

      Q.E.D

      I rest my case.

      there are TWO issues here:

      1. the first is inflation

      Inflation isn’t an issue here, just something you dredged up to sound clever, but no one is fooled.

      • if you are saying:

        1. – you don’t need energy and would rather just save money

        2. – and you think the money you saved is not affected by inflation…

        … good luck… might work for the “theorists” but not in real life.

        • LarryG, the most commonly accepted way to explain energy savings to a general audience (homeowner) is in time needed to pay back the purchase. A $2000 investment that saves you $200 per year has a payback period of 10 years.

          There are most sophisticated ways if you want to figure inflation and the time value of money for an energy saving’s purchase, but most homeowners would get lost in that explantion and the ones who would not know how to do the calculations themselves. I have built-in calculators in my energy engineering software for it, too.

          • re: payback

            agree.

            but you ARE going to have a refrigerator. It’s simply nonsensical to say you’d be better off not to have one and invest the money instead.

            agree?

          • LarryG, for an energy-consuming device you must have to live, the choices would be: keep what you already have, buy the cheapest replacement, buy a more expensive replacement. You would need to know the energy consumption and price of each and how long you plan to keep it to make a decision on that basis. If your wife just wants a new refrigerator because she wants a blue one, I can’t help with that calculation.

            Figuring out if I should have “a” furnace or the same amount of money in the bank would not be a relevant decision to me regardless of any inflation we may have or how much money I could make on my investments.

          • @walt…

            so you ARE going to have a fridge AND you are going to buy the most cost-efficient one – all things considered.. even if it is “blue”?

            and you’re not going to tell your wife that the “opportunity cost” of not having a fridge is far, far better than paying to have one, right?

            So “opportunity cost” AKA “RON” is a totally off the wall perspective… when talking about the relative merits of more energy efficient appliances….

            right?

            why I bet even Ron has a fridge and pays the electric bill to keep it running…

            :-)

          • LarryG, I think you are not understanding both Peak’s and Ron’s point.

            Peak observed that the ADDITIONAL cost was not worth the ADDITIONAL investment using the numbers supplied from the suggested energy savings being invested at 8%. Ron appropriately called that opportunity cost.

            The choices were never between say 0 inches of insulation or 30 inches of insulation but between say 15 inches of insulation and 30 inches of insulation. I think the money saved over 30 years appears low from what I know, so it could be either a writer’s mistake or a miscalculation somewhere along the line.

    • LarryG: “the “opportunity” cost that assumes that you’d not use energy at all”

      Please do us all a favor: learn what is meant by terms such as “opportunity cost” before you try to discuss them on an economics blog.

      As I said before, there is nothing theoretical whatsoever about the concept of opportunity cost. Finance professionals and decision makers use that concept every day at every business in America in evaluating courses of action.

      It is clear from your responses that you have never prepared a financial analysis. This is way over your head, man. Cut your losses now.

      • re: ” As I said before, there is nothing theoretical whatsoever about the concept of opportunity cost.”

        the CONCEPT IS THEORETICAL guy

        it’s when you get to actual practice that things can vary and sometimes considerably.

        In fact I HAVE done financial analyses and I do know from experience that THEORY is not PRACTICE.

        that’s the problem with you yokels. you look at these things as if they MUST conform to your concept and in the real world it’s not so simple.

        bug off.. with your attitude

        • No, Larry. The concept of opportunity cost is not theoretical. I am a real world practitioner of financial analysis. It is obvious that you are not.

          • the CONCEPT IS the practice is not but the practice does not conform uniformly to the concept and theory because of real-world distortions.

            you’re just tap dancing here guy… if you really do do , financial analysis you KNOW what I am saying is TRUE.

            you are just using this as an anti-govt platform…

            the real world is that people DO use the yellow energy tag to make opportunity cost decisions… and they do use CR and other publications reliability ratings, just as people use nutrition labels on food and EPA fuel efficiency ratings on vehicles – all to use in what are opportunity-cost decisions.

            so just shut down your blather machine… I’m not buying it any more than the other zealots here.

          • and John – people – many, many people do some form of opportunity cost even if it is not “pure” in concept and your condescension only makes you look pompous and foolish.

            people who really do what you say you do – will readily admit that its a big, involved complicated process when done at the business level – and that no, it’s not pure in implementation…

          • and John – people – many, many people do some form of opportunity cost even if it is not “pure” in concept and your condescension only makes you look pompous and foolish.

            people who really do what you say you do – will readily admit that its a big, involved complicated process when done at the business level – and that no, it’s not pure in implementation…

            And yet MORE evidence that you have no idea what the term “opportunity cost” means, even though it’s been explained to you several times.

            Take John’s advice – get a clue before you comment on an econ blog. You’re too funny for words.

          • it’s true, it’s an economics blog. It’s also true that some of you Ron don’t know shit from shinola ON PURPOSE because of your virulent anti-govt ideologies.

            and you try to cover this up by dissing those you disagree with.

            opportunity cost is a simple term – not so easily implemented – as the discussions in this blog have proven yet from your limited intellect – all you can do is find opportunities to ankle-bite.

            you’re not only unreasonable, you’re just plain mean for not good reason. I have a special affinity for mean folks, seen them much of my life and have very little respect for them. I have equal contempt for pompous asses..so Ron.. you batting two for two.

            John was playing a similar version IMHO. Opportunity cost has a lot of moving parts in the real world and though the concept is simply – in theory- in practice – as shown by the comments here, it’s not so simple – especially in you start out with a wrong premise.

            so Ron, until we meet again at the next face-slapping fun.

        • In fact I HAVE done financial analyses and I do know from experience that THEORY is not PRACTICE.

          Oh wow! I would love to see one of those analyses. Anything you care to share?

          LOL

          • I’ll try one. Here are four real-world decisions, not theory, to make with $5000-$10,000 that you decide not to spend on current consumption: 1) insulate your house and save a best-estimate 3.38% on the investment over 30 years and receive unquantifiable comfort and property value, 2) pay down a 3.5% mortgage, 3) leave the money in a mutual fund that has made 19% YTD but can easily go down 30% to 50% if we have a recession, or 4) put the money in a super-safe 0.01% interest-bearing account that loses purchasing power even with minimal inflation. You can only choose one, and you have to choose within 30 days. What would you do?

          • Walt asks: “What would you do?

            Oh Boy! A fun game.

            I was hoping to see an analysis Larry had done, but this looks like fun, so I’ll play, but first some qualifiers:

            Obviously different people will place different values on the importance – to them – of these choices based on such things as their age, income, net worth relative to their income, and risk tolerance among other things.

            At my age, and based on my individual circumstances, I would actually be more likely to consume it than save it, but that’s not one of the choices.

            From a strictly financial perspective I would choose #3 – the mutual fund, as I believe that choice provides the greatest potential return within a time frame that’s meaningful to me, and it has reasonable liquidity.

            #1 is a poor investment due to a break-even of more than 20 years at 3.38%. It is a one time choice with no change of mind later. IMO it is unlikely to add much, if anything, to the value of the home in the distant future, and comfort is the same with or without the insulation, the difference being the cost of energy used – the basis of your return on investment and the whole reason for insulating.

            #2 is a terrible idea, unless a person really believes inflation will remain low, and I don’t. In fact, I believe the real current inflation rate is greater than 3.5%, so the more I can borrow at that fixed rate the better. I would anticipate paying that loan back with much smaller dollars over the long term.

            # 4 is worst of all, if denominated in USD. All else equal, it might be better to bury it in your back yard so you won’t have to drive to the bank when you need it.

          • From a strictly financial perspective I would choose #3 – the mutual fund, as I believe that choice provides the greatest potential return within a time frame that’s meaningful to me, and it has reasonable liquidity.

            I would purchase shares in a royalty company like Franco Nevada or Eurasian and wait. While not as liquid as mutual funds the risks are much lower because you do not have the same exposure to the currency and bond markets.

          • I guess all those credit default wizards had a slight miscalculation on opportunity costs?

            Not at all. When you can create purchasing power out of thin air you take it. And when you get a big bonus when you gamble and win but have the government bail you out when you lose there is no miscalculation when you are being reckless because it is the taxpayers and suckers who are left holding the bag.

          • Vangel and Ron, your replies shows that Carpe Diem readers are not an average financial audience! There’s a ton of money in 0.01% accounts, and I would bet a huge number of people you know have all of their money there.

          • re: ” Actually, that’s 0.10% not 0.01%”

            yeah.. I was looking at the .01 number and whistling and it was not Dixie!

          • Ron, that is a nice discussion about my four choices. Thanks!

            I am not paying my mortgage down because I have never made less than 3.5% over time with my investments when viewed in the aggregate. I am going to insulate, ventilate, and weather-strip because of the comfort value in a cold room I spend a lot of time in (the 3.38% is either not accurate and or applicable in my case). Luckily, I can pull enough out of the 0.01% account to do the job AND keep my 19% mutual fund, so I have an option I did not give you all.

          • I guess all those credit default wizards had a slight miscalculation on opportunity costs?

            Once again, Larry, you should really understand what that term means so you don’t continue to use it incorrectly on an econ blog.

          • Vangel

            I would purchase shares in a royalty company like Franco Nevada or Eurasian and wait. While not as liquid as mutual funds the risks are much lower because you do not have the same exposure to the currency and bond markets.

            I wasn’t given that choice, but I might do just do exactly that using funds I can wring out of my RE equity at 3.5%.

          • I wasn’t given that choice, but I might do just do exactly that using funds I can wring out of my RE equity at 3.5%.

            The Franco model is awesome. The company started up around 1982 just as the commodity bubble was bursting and rode the trend all the way down until it got taken out by Newmont. The compounded return to investors was 36% per year. The company got spun out of Newmont and is now run by one of its original founders. If you like to gamble they have a warrant that goes out to 2017. While it is deep out of the money it gives you a chance to buy and forget while limiting your total possible loss. The Eurasian people love the Franco model and are trying to replicate it. (As is Silver Wheaton.) If you ever get a chance to go to one of the mining shows or investment conferences that take place in cities like Chicago, Vancouver, Calgary, San Francisco, Vegas, Munich, Vail, New Orleans I would take the opportunity. While most of the companies are the type of promoters that we usually find in the shale or alternative energy space there are a few solid players with wonderful business models.

          • Walt

            I am going to insulate, ventilate, and weather-strip because of the comfort value in a cold room I spend a lot of time in (the 3.38% is either not accurate and or applicable in my case)

            Wouldn’t it be cheaper just to use a portable electric heater in that room? Of course I don’t live in MI so the suffering may be more intense than I imagine.

          • “I’m getting the distinct impression that Ron is not the payer of the electric bill, eh?”

            I am a former GM worker. Ron probably thinks he is paying it.

          • Electric heater? No, my heat loss is much more than a standard 1500 watt heater can supply. I have almost four exterior walls in a north facing room built on an uninsulated concrete slab with an 8 foot patio door on one wall and a full-wall brick chimney on the north side.

            It was a garage at one time, and now it is a family room. I have a lot of duct work, insulating, and excavating to do to get the room where I want it to be.

          • Not on my room specifically, Larry. But, I teach heating and cooling analysis using Manual J software, and I install and repair heating and cooling equipment. I would have to change out my hi-temperature boiler to a low-temperature boiler to use radiant floor heating and alter all of my doors and entranceways to make up for the increased floor thickness. For now, my goal is to reduce energy going out and not just putting more energy in. My plan may change to get the results I want.

          • Larry, the credentials pay the bills, and let me do what I want to do instead of what I have to do. That and almost 40 years of working 60-80 hours a week and going to school at the same time :)

          • Walt – congrats! Not everyone is so fortunate to end up with your situation and you got there on purpose!

            :-)

          • Walt

            I am a former GM worker. Ron probably thinks he is paying it.

            What! You mean I’m NOT? :)

            Larry, read this carefully: The amount of savings in energy cost Walt expects to get from his insulation investment of $5-10,000 is between $169/yr and $338/yr at 3.38%.

            The question is whether he could buy a portable electric heater for less than $100and operate it for less than $169 – $338/yr to get the same result in comfort. Who pays the bill has no bearing on this question.

          • Ron –

            1. – do you pay your own electric bill

            2. – have you ever used an electric heater for any
            length of time and noted the impact on your bill?

          • It was a garage at one time, and now it is a family room. I have a lot of duct work, insulating, and excavating to do to get the room where I want it to be.

            Well, now I better understand your problem. Perhaps you should use this room to park your car in and start hanging out in some other part of the house where it’s warmer.

            Who would do such a thing? apparently Michigan was a much warmer place in years past.

            There are alsoother ways to deal with a cold room.

          • Hang out somewhere else? Not me. I am not sitting in a formal living room with white carpet, glass knick-knacks, antiques, and no TV or stereo. I want my NASCAR, I want my football.

          • 1. – do you pay your own electric bill

            2. – have you ever used an electric heater for any
            length of time and noted the impact on your bill?

            I don’t intend to play this silly 20 questions game with you, Larry, you can easily determine for yourself, based on your own electricity rate, whether using a portable heater would cost you more or less than the expected savings from insulating.

          • Walt

            Hang out somewhere else? Not me. I am not sitting in a formal living room with white carpet, glass knick-knacks, antiques, and no TV or stereo. I want my NASCAR, I want my football.

            In that case, I’m surprised you don’t want the more realistic experience you would get from leaving the room cold and wearing snow gear.

  4. 2290 at 4% inflation over 30 years

    amount needed to break even = 7227

    but all of this is moot if you have to buy energy anyhow.

    the question is – what is the most cost effective way to buy energy over than 30 years.

    • No, Larry, the question is, after all the thoughtful explanation by Walt, why do you still not understand what is being discussed here?

  5. Should any significant portion of the lowered purchase price of appliances be attributed to the advent and current dominance of Best Buy – ‘Big Box’ over Montgomery Ward(1981), that were used as the examples of places to buy large appliances?

    I recall that my parents (1960′s-80′s) bought from the ‘local’ single location neighborhood appliance store for the kitchen/Tv/radio and the Washer/Dryer came from Sears. Even the very high-end appliances are now sold at multi-outlet regional appliance chains.

    • Yes. Lower costs at every stage of supplying you with an appliance – from raw dirt to installing the completed appliance in your kitchen – has lowered the price you pay for it.

    • Not sure about the “single-ness” of appliance stores back then, Jay.

      As I remember the appliance market in the 1950s and 1960s, competition was certainly not absent. Even consumers in a smaller city of 60,000 one could purchase appliances from 5 or 6 local retailers in addition to the Sears/Wards chains.

      Your point about big box retailers is valid, though, IMO. Over the past five decades, economies of scale coupled with technology have enabled vast improvements in logistics. As a result, a dozen or more Best Buy or Walmart or Lowe’s retail showrooms can be served from a single hyper-efficient regional warehouse/delivery point.

  6. In most cases the improvement in energy efficiency was gained at the expense of severely reduced quality of output. In the case of dishwashers and clothes washers, they use colder water and omit agitators. They also don’t work very well.

    You can’t get warm or hot rinse cycles in clothes washers anymore, so far as I can tell. That means that encrustment (it’s why your towels get “hard” over time) can’t be washed out, detergents don’t rinse away like they should, and your clothes naturally are not as clean. The resulting shorter lifetime for your clothes are great for manufacturers, terrible for consumers.

    You will note that standard washers don’t meet Consumer Reports “acceptable” level anymore. You have to buy washers 2-3x the price to even get to acceptable, and none at any price meet “excellent”.

    • Bingo. That’s progress, I guess. Anything to save the planet by reducing energy usage. /sarc

      We could save even more by simply putting dirty dishes in an attractive cabinet-like device that used no electricity at all, then just taking them out when the mechanical timer went off. Clean? No, but we would save tons of energy.

    • Actually on dishwashers more come with a thermostat that heats the water to 140 f or higher, so you can leave the hot water heater at 120 to prevent burns and scalding. When I last had a water heater replaced the plumber said he could not turn the thermostat up on the hot water heater, but could tell me how.
      Of course on rinse cycles in general if you went back to the old wringer days, you used cold water in the rinses, and in general washed multiple loads with one load of water. The water got colder and colder thru the day.

      • Multiple loads with one load of water, plus cold rinses, equals perpetually dirty clothes. I suppose that’s ok when you’re only bathing once a week or less. Why would we want to go back to the wringer days? Unfortunately there’s a significant portion of the environmentalist lobby that idolizes the “good old days”, and yearns to put a boot to the throat of anybody who won’t get with their program.

        The primary thermostat on the dishwasher may not be how they’re .saving energy. As with clothes washers, it’s all about using cold water in one or more cycles. Thus you are “saving” energy by not using energy, rather than by increasing efficiency. I doubt there were any significant efficiency increases to be had.

        • might want to check Consumers Reports on the washers.

          there’s 74 of them all rated pretty well and most in the 500-800 range.

          most all have features for mixing cold or hot water.. also

          cold water detergents are the standard in many parts of the world including Japan and do a pretty good job.

          You do not sound like you actually use a washer…do you?

          • You should read a little deeper. They actually rate the best top loaders in their test as worse than the worse top loaders of 20 years ago. The washers they actually recommend are front loaders starting at about $1500.00 a pair and going up from there. You’ll never save enough electric to pay the difference but you get to feel good.

  7. Out of my Residential Energy, Krigger and Dorsi, textbook:

    “Washing dishes by hand uses much more water than using a dishwasher. Using an ENERGY STAR qualified dishwasher instead of hand washing will save you annually 5,000 gallons of water, $40 in utility costs, and 230 hours of your time.”

  8. re: “efficiency”

    a standard Sears dishwasher has an estimate energy usage of about $27 a year on electricity and $22 a year on gas.

    that’s about $2 a month.

    As Walt said… if you did them by hand.. the cost would be far higher.

  9. The point is the money you save is less than the higher cost of living.

    And here’s what Jeremy Siegel says about stock market returns:

    “The average compound after-inflation rate of return on stocks from 1802 through 2002 was 6.8 percent per year, and this number has remained remarkably steady over time. A 6.8 percent annual rate of return means that if all dividends are reinvested, the purchasing power of stocks has doubled, on average, every ten years over the past two centuries…the real return on stocks since World War II is virtually identical to that prior to that war.”

    • Max, your chart starts from a peak year, i.e. 2000, after huge economic gains in the 18-year structural bull market and height of the Information Revolution.

      U.S. living standards continued to improve substantially in the structural bear market that began in 2000, in part, because U.S. trade deficits reached $800 billion a year, or 6% of GDP (i.e. the U.S. consumed more than produced), while the country was at full employment at roughly 3% real growth, after the shallow recession in 2001 (a recession so mild that per capita real GDP didn’t fall in 2001).

      • The “Misunderestimated” President:

        Bush inherited the worst stock market crash since the Great Depression and a recession. However, the Bush Administration turned the recession into one of the mildest in U.S. history (which wasn’t a recession based on annual per capita real GDP growth), after the record economic expansion and structural bull market from 1982-00.

        Over a five-year period in the mid-2000s, U.S. corporations had a record 20 consecutive quarters of double-digit earnings growth, two million houses a year were built, 16 million autos per year were sold, U.S. real GDP expanded 3% annually, in spite of 6% annual current account deficits (which subtract from GDP).

        The U.S. economy was most efficient, while Americans stocked-up on real assets and goods, and capital was built-up. It was one of the greatest periods of U.S. prosperity, the fourth longest economic expansion in U.S. history, and in a structural bear market that began in 2000.

        The Bush Administration was adept at minimizing the recession in 2008, including providing a tax cut in early ’08 for the Fed to catch-up easing the money supply, until Lehman failed in Sep ’08, which caused the economy to fall off a cliff. However, appropriate policy adjustments were implemented quickly.

        If Bush could’ve been reelected and had his way, the U.S. would’ve completed a recovery in 2010, and we’d be in a strong disinflationary expansion instead of this on-going depression and “train wreck.”

  10. Lyle said,

    “So it took government to kick the executives of makers of fridges to make changes that afterwords turned out to be an economic win for all.”

    That is wishful thinking of the worst sort. It requires a stunning amount of hubris to believe government regulation can overcome engineering limits.

    Engineer comments

    This is called “technology creationism” where the market government regulators states a wish and we engineers conjure it up from thin air.

    As a group we’re too dumb to know what to make until the market government regulators demands it, at which point we act.

    Refrigeration was known in the early 1900′s but even in the 1930′s was affordable only to business and the very rich.

    Start in 1931; you now have 80 years since then for the development of the lower energy models the european market demands. The advances to get to this stage included better insulation, lighter linings, as close to frictionless pumps as can be mass produced, years of experience with regfrigerants, tighter machine tolerances in construction, etc.

    To get to the modern fridge the ‘market demands’ was a long road of complete reinvention of even the tools and machinery used to make them. Current electrical prices make it easier to choose a more energy efficient model, but this model can only exist due to generations of improvement from the early concept stage.

    In other words — lucky for you, today just so happens to be the era in which you can even “demand” such a device.

  11. Bottom Line: Today’s modern household appliances are not only cheaper than ever before, they are the most energy-efficient appliances in history, resulting in additional savings for consumers through lower operating costs…

    What nonsense. The energy efficiency rules have taken improvements made by manufacturers competing in the marketplace and have set them back a decade. Dishwashers no longer wash and dry dishes properly. The new regulations mean that dishes will be dirtier than ever before and that they will not come out clean after the process is complete. And all that for around $30 of ‘savings’.

    If you want great appliances stop the regulators from screwing up the design process and from getting between the consumer and the producers. Get rid of the regulators who think that they are a better judge of requirements and let the market do what it does best.

    I would stick to writing about economics Mark because every time you venture out into fields that you do not understand you make statements that are obviously false and not well thought out.

    • ” Dishwashers no longer wash and dry dishes properly.”

      lord!

      do you actually USE a dishwasher?

      I have, for decades and the 20 year old KitchenAid that went belly up was replaced by a Sears and the Sears cleans dishes better at about 1/3 the water use and energy cost.

      True also of our clothes washer.

      where are you guys getting this ” they don’t clean ” stuff from?

      Consumers Reports tests dozens and their assessment is pretty much what Prof. Perry said – and as I said, borne out in our experience.

      • Our friend asks a valid question. The problem is that he trusts reviewers rather than users. Go out to the sites where the equipment is sold and read the common complaints. It is very clear that energy efficiency is sold more as a moral principle that is elevated above actual functionality. From what I can tell there are three serious issues thanks to government intervention.

        First is the setting of water heaters to levels that are too low so that money can be ‘saved’ by users. The problem is that if the water is not hot enough dishes and clothes will not come out as clean because bacteria will not be killed off.

        Second is the limiting of both electrical energy use and water use. This makes it much harder to get everything as clean as possible and makes drying rather difficult for many models.

        Third is the elimination of TSP, which makes it harder to really get dishes clean in areas where mineral content in the water is an issue. That is why many homeowners add their own TSP to the dishwasher or clothes washer.

        Another issue is the use of so much electronic equipment that can be sensitive to power fluctuations. One of my friends spent tens of thousands of dollars to rewire the home add line conditioners so that his equipment could be more reliable. On the plus side, the use of sound dampeners has really cut down on noise but that improvement was driven by the market, not regulators. The only thing the regulators have done is to put up hurdles that makes it harder to get good equipment at the lowest possible price.

        • well, I trust some user reviews also but mostly I look for info from a variety of sources to see where there is general concurrence.

          but I think modern washers are better than earlier versions and modern detergents are good also and I do personally use both.. so I do have that perspective.

          • but I think modern washers are better than earlier versions and modern detergents are good also and I do personally use both.. so I do have that perspective.

            The regulations have done a huge amount of damage. Detergent is no longer capable of getting clothes as clean because many of the agents that did such a great job have been banned. The machines do not use enough water and the water that they use is usually not hot enough because ‘modern’ heating tanks are set too low. Everything from toilets to washing machines are a lot worse than they should be because government has not gotten out of the way.

            http://tinyurl.com/7xnz49p

          • ” The regulations have done a huge amount of damage.”

            no. no. no. there was DAMAGE being DONE to the ENVIRONMENT that caused the regulation.

            as usual you got it backwards.

            I dunno about you link… not bringing up another site.

          • no. no. no. there was DAMAGE being DONE to the ENVIRONMENT that caused the regulation.

            as usual you got it backwards.

            I dunno about you link… not bringing up another site.

            There is no damage done to the environment if you use an extra gallon of water or use more electricity because you want your dishes to dry. The excuses are BS by people who want to tell others what to do.

        • The water heater setting change was due to the number of folks being burned by hot water from the tap. One does need to ensure that the todays dishwasher has a booster heat setting to raise the water from 120 to 140f. So the water heater temp setting is a human safety issue more than anything else. (When I had a new one put in the plumber said he could tell me how to raise the temp, but could not raise the water temp himself, but the water heater did allow for higher temps, so if one reads the manual one could raise the temp if desired)

          • S…the plumber said he could tell me how to raise the temp, but could not raise the water temp himself, but the water heater did allow for higher temps, so if one reads the manual one could raise the temp if desired)

            That statement makes my point. In a nanny state good intentions often cause things not to work well for many people.

        • That statement makes my point. In a nanny state good intentions often cause things not to work well for many people.

          That’s right. The added inconvenience and extra time and effort spent cleaning by millions of people, not to mention the lower germ killing power of lower temperature water far outweighs the reduced number of burns incurred by a few people who should know that hot water is hot – by design.

          • re: ” That’s right. The added inconvenience and extra time and effort spent cleaning by millions of people, not to mention the lower germ killing power of lower temperature water far outweighs the reduced number of burns incurred by a few people who should know that hot water is hot – by design.”

            you simply don’t know what you are talking about – have clearly not used a dishwasher.

            Ours has a normal and a sanitizer setting. The dishes are very hot on completion of normal setting. At the santitizer setting, you cannot even hold the dishes.

            ditto with the water if you open the washer mid-cycle and put your finger in the well.

            you talk about pulling stuff out of your butt.. jeesus.

        • you simply don’t know what you are talking about – have clearly not used a dishwasher.

          Poor Larry. A pertinent response would have addressed government regulation of water temperatures. Why are you on about dishwashers?

          .Ours has a normal and a sanitizer setting. The dishes are very hot on completion of normal setting. At the santitizer setting, you cannot even hold the dishes.

          ditto with the water if you open the washer mid-cycle and put your finger in the well.

          Heh. Larry, that is truly special! Thanks for sharing.

      • Well Larry, actually what Consumer Reports said was that they don’t get your dishes very clean or sanitary. The Feds also forced the detergent makers to remove the phosphates from automatic dish washer detergent, you know, the stuff that actually cleaned your dishes, so you’re washing your dishes with mostly fillers and pixie dust. We throw some TSP in ours every night to make up for it but my dishes still don’t get clean, a problem we never had 25 years ago.
        but don’t take my word for it. Look it up and maybe even Google the problem. You’ll get lots of hits.

        • re: ” Well Larry, actually what Consumer Reports said was that they don’t get your dishes very clean or sanitary. ”

          not what I read… can you show a quote?

          “The Feds also forced the detergent makers to remove the phosphates from automatic dish washer detergent, you know, the stuff that actually cleaned your dishes, so you’re washing your dishes with mostly fillers and pixie dust.”

          yeah like lead in gasoline boosted octane or lead in paint improved the paint. what’s your point?

          ” We throw some TSP in ours every night to make up for it but my dishes still don’t get clean, a problem we never had 25 years ago.”

          do you also put lead additive in the gas tank?

          “but don’t take my word for it. Look it up and maybe even Google the problem. You’ll get lots of hits.”

          sure you do.. you can get LOTs of “hits” for just about every point of view and then go focus on the ones that support your point.

          A huge majority of homes in the US have dishwashers.

          People use them every day.

          I’ve never heard of anyone having them removed because they don’t “clean” good enough.

          We’ve had one for decades and they work fine – even without TSP and of course our car works fine without lead and so does the paint on the house.

          this is just foolishness….that some folks can’t seem to resist.

          • and of course our car works fine without lead and so does the paint on the house.

            Are you sure you want to go there? Your ignorance might trip you up.

          • re: lead in gas, the reason for environmental protection and “ignorance” spoken of by Neanderthals

            lord. lord.

          • re: lead in gas, the reason for environmental protection and “ignorance” spoken of by Neanderthals

            Another cryptic and therefore meaningless comment from Larry.

            Have you ever wondered why there ever WAS lead in gasoline to begin with?

        • here is a small part of what CR said:

          ” Pulling dirty dishes from the dishwasher? Low- and no-phosphate detergents, the only types available since mid-2010, have been getting the blame. But you don’t have to wait for the entire class of newly formulated products to improve. Some dishwasher detergents clean well now and don’t leave food behind.”

          so what CR are YOU reading?

    • We’ve been in a bear market since 2000, after a spectacular bull market from 1982-00, which will continue for several more years.

      Sadly, with people like Perry hyping up every blip as a recovery most people have not noticed.

  12. so, here’s an interesting question:

    i think there is little doubt that the new dishwashers and washing machines are better than those of 30 years ago.

    let us for the sake of discussion agree that they are.

    however, in recent years, they have begun to work far less well.

    in fact, i suspect few people think their dishwasher or washing machine works better than in 2000.

    this is not the fault of the machines.

    it’s due to a change in the detergents that removed phosphates.

    http://www.npr.org/2010/12/15/132072122/it-s-not-your-fault-your-dishes-are-still-dirty

    thus, despite having a better dishwasher, you get dirtier dishes that your mom did.

    (for those who doubt this, go buy some phosphate additives for your dishwasher and try it. they are available on amazon. it’s night and day different.)

    so here’s the tricky bit:

    if we are going to use quality adjustments in CPI, how do we account for this?

    this is a great example of just how tricky this can get.

    so, the dishwasher is better, but the dishes come out less clean.

    so if we apply a positive qual adjustment to the dishwasher and lower it’s price and a negative one to the dish soap and raise it’s price, the relative value of the two things causes the positive adjustment to swamp the negative and we get a net positive adjustment on a situation where the net outcomes are clearly worse than before.

    i’m not sure there really is a good way to handle this. you have a better machine, a worse input, and a worse outcome. if you look at the 2 products individually, you get one answer, if you look at the outcome, you get another.

    so what are you really measuring? dishwashers? cleaning ability? the cleanness of the dishes that emerge? should all dishwashers suffer a one time negative quality adjustment then phosphate detergent was banned as they simply no longer work as well?

    how would you size that? how could you ever keep track things like that?

    this is why i think quality adjustments are so fraught. quality is simply too subjective, subject to interpretation and bias, and too easy to miss big portions of.

    • re: phosphates

      were recognized as harmful to waterways including food source fish, etc and the laws required removing phosphate to minimum levels.

      At that point – the choice was whether you would pay the sewage treatment plant to remove them or just not put them in to start with.

      Ultimately those who put phosphates back in – are costing everyone more money because the sewage treatment plans still have to take it back out.

      but machines today clean better than machines of old even without the phosphate.

      Here’s how most people judge.

      do your dishes come out of the washer clean and you can stack them and use them without further washing?

      If you answer yes, then it don’t really matter whether they could be “cleaner”.. not even sure how you’d actually measure that … and I’m sure an organization like Consumers has actually tested with and without… at some point.

      but you can tell how many folks here :

      1. – actually use dishwashers on a daily basis
      2. – have active subscriptions to Consumers Reports.

      • larry-

        1. the science on which this phosphates thing was based is largely crap. the “algae blooms” driving biodeath it was supposed to be causing largely went away long before any bans.

        2. if you think machines today clean better than machines before with phosphates then you have no idea what you are talking about. that is so unambiguously untrue it’s laughable, especially if you live somewhere with hard water.

        i have a meile la perla dishwasher. it’s arguably the best dishwasher on the market. it does not clean as well as my cheap GE did back in SF using phosphate detergent. it probably costs literally 10x as much.

        you are just making up facts here. google it. read the comments and news stories.

        it does not matter if you have 5 spray arms and 40 cycles. without phosphates, good luck getting scrambled egg off a stainless steel pan.

        of course, when i add phosphates, this happens instantly and i get no egg left.

        try it yourself.

        so no, my dishes do not come out clean despite having a $4k dishwasher. they used to with a $400 one.

        unlike then, i now have to hand wash many of them.

        doubtless, so do many other folks.

        “but machines today clean better than machines of old even without the phosphate.”

        that claim is complete nonsense. you flat out made it up. it has no support in fact.

    • At that point – the choice was whether you would pay the sewage treatment plant to remove them or just not put them in to start with.

      But that choice has been taken away, Larry, someone has decided for us which one we should prefer.

      but machines today clean better than machines of old even without the phosphate.

      That is straight out of your ass, Larry, you have absolutely no basis for saying that, and most people who have offered an opinion on the subject have had a very different experience.

      Here’s how most people judge.

      You have no idea.

      but you can tell how many folks here :

      1. – actually use dishwashers on a daily basis
      2. – have active subscriptions to Consumers Reports.

      Larry, that is amazing! How were you able to do that?

      And how many folks here are in each group? May the rest of us know?

      • ” But that choice has been taken away, Larry, someone has decided for us which one we should prefer.”

        yes.. they looked at the costs and decided is was less costly to ban residential phosphates.

        the same as they decided to ban lead in gas and a variety of other substances deemed harmful.

        don’t confuse your pathological hatred of govt with the facts, please.

        re: opinion about cleaning… since I’ve yet to see a definitive link to support statements here.. I feel free to join the “pull it out your butt” fun.

        • yes.. they looked at the costs and decided is was less costly to ban residential phosphates.

          It’s OK with you that “they” make choices for you? do you believe “they” are much smarter than you and better able to make those decisions? Poor Larry

          What exactly does the term “costly” mean in this context? It would be less “costly” to forbid washing of clothes and dishes entirely wouldn’t it?

          the same as they decided to ban lead in gas and a variety of other substances deemed harmful.

          Fairly good alternatives existed for TEL. Not so for phosphates.

          re: opinion about cleaning… since I’ve yet to see a definitive link to support statements here.. I feel free to join the “pull it out your butt” fun.

          Have you completely missed morganovich’s recent comments regarding his own personal experiments and experience? Do you totally disregard the findings of CU? How about the reviews and ratings provided by purchasers at the many retail sites? Do you need to be hand carried to such information, or can you use the internet like everyone else does?

          What happened to your claim of investigating all sides of a question before coming to a conclusion, Fair Minded Larry?

          • re: opportunity lost – one would presume that part of a cost-effective analysis would include the “no build” case.
            that seems to be common sense to me.

            re: dishwashers – are you discounting MY experience and the articles I’ve read in CR?

            do you subscribe to CR guy? do you actually read the articles?

          • re: opportunity lost – one would presume that part of a cost-effective analysis would include the “no build” case.

            That’s “opportunity cost“, and as all value is subjective, no article can presume to explain what your individual opportunity cost is. Peak used an equivalent investment in the stock market an example. To continue a discussion of this particular concept you will need to learn what it means, otherwise it’s pointless.

            that seems to be common sense to me.

            LOL! That has no meaning outside of Larry World.

            re: dishwashers – are you discounting MY experience and the articles I’ve read in CR?

            Yes, Larry, I’m discounting your personal experience completely, and I have no way of knowing what you have read, so I can’t comment on that, but if the past is any guide, I feel certain you didn’t understand what you read.

            do you subscribe to CR guy? do you actually read the articles?

            Didn’t you previously say you already knew how many here subscribe to CR? You tell me – do I or don’t I?

          • well we can tell who has not read the several articles in CR on the subject … because they’re arguing opposite from what CR said.

            just as substitutes were found for lead in gasoline, substitutes exist for phosphates which do cause much harm in the environment.

            ironically those who use septic tanks would not be releasing phosphates into surface water and not likely ground water once it is metabolized in the septic field.

            Ron -.. you have a foul disposition guy but you seem to enjoy it …

            re: ” Peak used an equivalent investment in the stock market an example.

            it was not clear what the two choices were and if you had to have a dishwasher – there is no real concept of opportunity cost.

            It’s like saying if your car had not crapped out you could have invested the money.. well …DUH!!!!

            IF you are CONTEMPLATING ..UPGRADING to a more efficient unit – then it WOULD be appropriate to run the numbers to see which path was more cost effective.

            you theory guys are so locked-on to the dogma that you simply lack any common sense.

          • By the way, Larry, it should be obvious to even you that the “no build case” is that you keep the $2290 in your pocket and forgo the $6200 savings over 30 years. What you do with the $2290 is then your best choice based on your own individual subjective values.

          • re: what to do

            do you need a washer now or not?

            if you have a washer – but it’s old – what is your game plan in terms of how long it might last before you need to buy another?

            most folks would NOT have an accrual approach that takes into account the expected life broken down into periodic payments into a fund to buy a new one.

            and there are many other factors involved – for instance, when the wife says “we’ve had avocado TOO LONG”.

            try making the opportunity cost argument at that point.

          • it was not clear what the two choices were and if you had to have a dishwasher – there is no real concept of opportunity cost.

            It was very clear, to everyone but you, Larry. it was always a choice between energy efficiency and non energy efficiency and the higher initial cost of the former, with attendant lower energy costs.. There was never a question of appliances or no appliances.

            It’s like saying if your car had not crapped out you could have invested the money.. well …DUH!!!!

            It’s nothing like that, as has been explained to you numerous times. It is a true amazement that you can continue to not get it.

            IF you are CONTEMPLATING ..UPGRADING to a more efficient unit – then it WOULD be appropriate to run the numbers to see which path was more cost effective.

            Peak did that, and based strictly on cost estimates, an investment in the stock market and buying lower energy efficiency appliances won out over 30 years.

            you theory guys are so locked-on to the dogma that you simply lack any common sense.

            The only theory I subscribe to is that Larry has absolutely no ability to think logically.

          • this is so much blather… as usual here…

            if you bothered to look at the more than 100 washers available – you’d see that there is a WIDE RANGE of energy costs as well as a lot of uncertainty in what your interest rate would be – as amply pointed out to you.

            you’re not a reasonable person Ron – you must be a real pain to deal with in the other parts of your life.

          • you’re not a reasonable person Ron – you must be a real pain to deal with in the other parts of your life.

            Heh! Actually I’m a very reasonable person, I just have a low tolerance for ignorant, illogical bullshit – and you are the poster child.

        • “yes.. they looked at the costs and decided is was less costly to ban residential phosphates.”

          less costly for whom? not for me. what’s you evidence for this “less costly” claim? i think you are just making it up. did they take my labor into account or just decide it was easier to shove the costs onto me?

          just who was they? at what did they look? you seem to be making an awful lot of assumptions here.

          also: if you are looking to cut phosphates, you need to go after agriculture and industry. this dishwasher thing is like tryign to fight smog by banning lawn mowers.

  13. in fact larry, i may be the worst possible guy for you to make this claim to.

    when i bought my house, the kitchen had 3 dishwashers in it. (it’s a big kitchen)

    i planned to take one out and replace it with a wine fridge. 2 is nice, 3 seemed silly.

    i personally did a shoot out between the miele, the bosch, and the frigidaire both with and without phosphates.

    the miele was brand new. the frigidere was maybe 8 or 10 years old.

    using a phosphate substitute, even the elderly machine got all the food off the plates, even dried on egg. the $4k miele could not do it using current detergents despite having 4 or 5 spray arms instead of 2 and all of its sophisticated technology.

    add a little phosphate though, and bang, it can clean anyhting. it makes glasses so clear you can barely see them.

    it’s clearly an amazing machine and far better than either of the others. there was not even a contest. but if you gave either of the others phosphates, they beat it.

    the signle most important variable in getting all the food off the plates was using phosphates. (which is why i still use them)

    so sorry, but i myself have tested this. (and got rid of the bosch for anyone who cares. it was hands down the worst of the 3) i know precisely how older, cheap dishwashers using phosphates compare to the state of the art new ones if they do not because i tried it.

    i urge you to do the same. you can grab some phosphates on amazon for maybe $12. cake some scrambled egg in a stainless double boiler and try washing it both ways. see which one gets the egg off.

    then base your opinion on facts instead of making one up to suit your argument.

    • like I was saying.. we don’t seem to have the problems you guys report.

      I almost never see egg or anything else on any of the plates – with the exception of the frying pan which needs a few seconds of finishing work.

      Been that way for as long as I can remember through 2 different dishwashers.

      Bosch does test well in CR.

      here is one of several articles on Phosphate in CR:

      Not all low- or no-phosphate detergents are suds duds

    • Don’t say sorry. Everyone should have known what you meant. When your fingers do not match the speed of your thinking all kinds of misstatements are possible.

        • well, in that first case, it actually reversed the meaning of the sentence, so i though i ought to clarify it.

          in terms of my tying, uh, typing, well, i suspect that my lack of prowess in that regard has been made quite clear over time.

          the phrase “epileptic monkey with mittens on” has been mentioned in the past.

          • in terms of my tying, uh, typing, well, i suspect that my lack of prowess in that regard has been made quite clear over time.

            I suspect anyone who reads this blog regularly has learned to translate your typing, so your meaning is almost always crystal clear. :)

  14. Walt: “I am assuming the energy “investment” is safe the same way: locked in and predictable. ”

    No way! Please reconsider that assertion carefully.

    Here’s four very obvious uncertainties which sharply increase the riskiness of thirty year returns from investment in any energy-savings appliance:

    1. the very clear uncertainty about future energy prices (both gas and electricity prices have gone down as well as up over the years)

    2. the uncertainty about the useful life of any appliance (there’s a reason appliance manufacturers do not offer 30 year warranties)

    3. the uncertainty about the future usage of any appliance (a family of two adults and three kids uses a clothes or dish washer far less than an empty nester couple or a widow)

    4. the largest uncertainty of all: that a future technological development will make the energy savings available on future appliances without the required (mandated) investment (Remember that the estimated savings of the mandated appliance are calculated against a base which always changes – the market driven appliance)

    I could list many more uncertainties about your so-called “locked in” savings, but I’m not going to waste my time.

    An important part of my professional responsibilities over the past three decades is to assess the uncertainties of long term capital investment. No one with any expertise in my profession would assume that energy savings of any technological device are locked in for 30 years.

    • John Dewey,

      I agree some savings are difficult to estimate. I used Peak’s numbers as a constant and simply calculated a percentage rate from that. Yes, it was one number, it was quick, and it was dirty.

      What I would normally do is try to figure out probabilities at different rates of savings from historic information and the best forecast numbers available and develop a range of savings from least optimistic to most optimistic. I would feel comfortable the actual number was in that range somewhere. I have done quite a few life-cycle costing estimates this way.

      • John Dewey,

        I was assuming that the energy improvements in Peak’s example had an infinite life (like insulation in a new house) instead of a fixed life (like a dishwasher).

        I did life-cycle costing for industrial machinery, and we were given the life expectancy to plug into our calculations. Maintenance costs can eat up purchase and installation costs savings very quickly or the more expensive choice can have a greater salvage value, so the cheapest –even if it meets all the specifications – - is not always the best value.

        • Here is a basic life-cycle cost analysis. Cost over the life between equipment choices A, B, C assuming they all perform to a stated standard and they all have a 20-year life:

          1)Cost to buy, 2) Cost to install, 3) cost to run, 4) cost to maintain, 5) salvage value

          The different pieces of machinery might have different costs in each phase of their life (that is, equipment A might have a higher cost to maintain in year 5-10 than equipment B). Purchasing often buys a cheaper piece of equipment because its cost to buy is less, but that savings is eaten up by the cost to maintain it at the factory level.

          • Walt,

            A couple of points about your points:

            1. Any cost-benefit analysis that does not include adjustment for uncertainty is not valid. That adjustment is usually included in the form of varying factors used in discounting the cash flows included in the analysis. The discount factor for operational improvements will be much higher than the discount for the FDIC-insured investment returns you alleged were equivalent to the energy savings.

            2. I don’t know anything about the Purchasing Department where you work but I am dead positive that the Purchasing departments in most large corporations do not “often buy a cheaper piece of equipment because its cost to buy is less”. Buyers in large corporations are true professionals who definitely do not automatically sacrifice quality for short-term price savings. Why do you insult those professionals with your assertions?

          • John Dewey,

            1) That is in the software program. My post was bare bones.
            2) Purchasing very often takes low bid, and low bidders often cut corners that make repairs more difficult and expensive. We had one parts washer Purchasing “saved” $10,000 on that cost us $15,000 more to install than the second choice. Purchasing/Engineering is often a huge problem for preventive maintenance. I had almost 40 years experience with that.

          • Walt

            2) Purchasing very often takes low bid, and low bidders often cut corners that make repairs more difficult and expensive. We had one parts washer Purchasing “saved” $10,000 on that cost us $15,000 more to install than the second choice. Purchasing/Engineering is often a huge problem for preventive maintenance. I had almost 40 years experience with that.

            Hmm. Could that have anything to do with why GM has repeatedly failed?

        • Walt: “I was assuming that the energy improvements in Peak’s example had an infinite life (like insulation in a new house) instead of a fixed life (like a dishwasher).”

          Well, the post was about appliances, and Peak’s comment was in response to Lyle’s assertion that Califrnia mandates are responsible for nationwide reductions in refrigerator efficiency. I didn’t realize that Peak had chosen an example so far afield from the subject of this post.

          That being said, if you read the article Peak referred to, you will see that the mandates Peak references are not for insulation:

          “Proposed changes for commercial buildings include solar-ready roofs, automatic controls that adjust lighting levels to sunlight, better refrigeration equipment, reflective roofing and heat-filtering windows.”

          For those proposed changes, my examples of uncertainty are applicable. Furthermore, the uncertainty of industrial and commercial energy prices in California is likely to be much greater than the uncertainty of energy prices for residences.

          The bottom line is simple: energy-saving improvements should be driven by markets and not by the government mandates a socialist such as you would impose on the rest of us.

          • “The bottom line is simple: energy-saving improvements should be driven by markets and not by the government mandates a socialist such as you would impose on the rest of us.”

            I was doing cost analysis and not political analysis here. I would not try to quantify uncertainty. I would quantify risk where a possible range of outcomes can be measured.

          • Whether you like it or not, government mandates are political. Your comments in support of the cost-benefits of government-mandated energy-saving provisions cannot escape the argument about whether such mandates are socialistic.

          • If you have better numbers than Peak’s to do the opportunity cost savings, bring them on. Otherwise, find fault with my 3.38% calculation from those numbers. I am not supporting government interference one way or another in this thread.

          • Walt

            By accurate, I mean that actual life cycle experience closely mirrored your projections, not that someone liked your work and asked for more of it.

          • They are simply cost estimates using the best information you have on hand at the time along with the experience and knowledge from everyone involved. If that sounds like a cop-out, it is. We never really had people keep up with all the daily costs to track them as well as we wished. Do you have receipts for every penny and hour spent on your personal car(s)? You do the best you can.

            Our biggest mistake I can remember was buying a 10-mile long conveyor system from Germany that took an extra two people to service 24/7/365 for 15 years over the slightly more expensive U.S. model. We were in an austerity program at the time where low bid to buy was accepted regardless of the operating and maintenance cost.

          • I should add, we knew the German conveyor system was labor intensive to operate, but not exactly how much. We did advise against buying it. When I say “we made a mistake,” I meant as a company.

          • Walt

            They are simply cost estimates using the best information you have on hand at the time along with the experience and knowledge from everyone involved. If that sounds like a cop-out, it is. We never really had people keep up with all the daily costs to track them as well as we wished.

            Thank you for being candid. That’s what I thought was the correct answer.

            Do you have receipts for every penny and hour spent on your personal car(s)? You do the best you can.

            I do have records of all expenses, but not hours, as my *opportunity costs* are not as critical as they would be for a company like GM, and for me, the cost of tracking hours would likely outweigh any perceived benefit.

          • re: ” Thank you for being candid.”

            ergo – the difference between theory/concept and real life/practice.

            all the high and mighty “economic” blather coming from you and others ends up on the floor in real life.

            you try. you do the best you can. and you can be wrong (and “enough” right) as Walt has amply pointed out.

          • That is an experienced and educated wrong, which is not the same as grabbing some guy just walking down the road and asking him what he thinks. I might not always be right, but I want to be wrong less often than my competition.

          • Walt

            I might add that the hours I have spent on auto maintenance and repair generally got priced in terms of the alternative cost of having the work done by someone else, including my travel and wait time, and it turns out I made some pretty good hourly wages by doing the work myself.

          • re: ” Thank you for being candid.”

            ergo – the difference between theory/concept and real life/practice.

            Heh! Larry, whatever are we to do with you?

            Walt explained that he made life cycle estimates that were never subsequently verified against actual measurements, so no one knows if those estimates were correct or not. They looked good at the time to someone who made decisions, so they asked him for more of the same.

            It’s very much like climate models. Assumptions are made, estimates produced, but there are no actual measurements to verify those projections.

            all the high and mighty “economic” blather coming from you and others ends up on the floor in real life.

            you try. you do the best you can. and you can be wrong (and “enough” right) as Walt has amply pointed out.

            Oh Larry, if you only had a clue you would be dangerous instead of funny.

          • ” Assumptions are made, estimates produced, but there are no actual measurements to verify those projections.”

            are you talking about opportunity costs?

            now THATs FUNNY coming from you!

    • re: ” No one with any expertise in my profession would assume that energy savings of any technological device are locked in for 30 years.”

      but actually if energy costs go up – the return on investment gets better, right?

      the chances of energy costs going the other way are not good.

      • “but actually if energy costs go up – the return on investment gets better, right?”

        Yes, from a consumer perpective, but maybe not from a highly regulated supplier perspective. You would have to quantify that to make an investment decision between numerous alternatives IF that choice is left up to you.

        Opportunity cost is simply what you give up by making a choice between alternatives. I spent 2 hours in a Webcast curriculum meeting between 11 am and 1 pm today making money INSTEAD of blogging for free on Carpe Diem. We make numerous opportunity cost decisions every day even if we don’t call them that. Did you decide to give up an hour’s sleep this morning and get up early to watch TV or blog?

        • re: up early

          Walt – it’s called falling asleep on the couch at 9pm and usually only needing about 6-7 down time!

          you are entirely correct about everday opportunity cost decisions – as well as just how complex they can be even for seemingly simple circumstances.

          I note that the yellow energy tag has wide variations among different manufacturers for very similar appliance models and just that one variation can affect your analysis greatly.

          • Variations = ranges. Overlapping ranges are problematic, but if one appliance realistically costs $40-80 a year to run and the other costs $100-140, you know the first is cheaper to run. How much more you are willing to pay for the first appliance, and you will almost certainly pay more for the efficiency cost savings, is determined by how long you are going to keep the appliance and how much money you currently have to spend. People who have money usually make better long-term decisions about their money than people who do not have money because they know how and they then can.

          • Even CR will get tangled up on these analyses… and will warn that some things simply cannot be easily quantified nor predicted.

            And that’s why in addition to energy metrics, they include reliability metrics.

            An appliance that is twice as energy efficient as others but lasts half as long – can push the analysis into even more complexity depending on the cost of the appliance and the cost of energy.

            Even large corporations with professional staffs can screw up on these and do.

          • LarryG,

            Yeah, but how much money does a baseball player who strikes out a lot and hits a lot of home runs make? You aren’t going to win them all, but if you have a good strategy you should win more than you lose.

          • re: ” but if you have a good strategy you should win more than you lose.”

            if all wins and losses are equal… some wins and some losses can be extreme…. so proportionality is also important.

            the “gambler” will go for the big risks with big rewards but there are usually far more losers in this group than winners.

          • Again, that depends on your perspective. Casinos are one side of the gambling equation. How are casinos doing?

          • People who have money usually make better long-term decisions about their money than people who do not have money because they know how and they then can.

            And making better decisions is why they HAVE money.

      • but actually if energy costs go up – the return on investment gets better, right?

        the chances of energy costs going the other way are not good.

        Actually, taking a longer view of historical energy costs shows that energy costs have decreased over time. There is no reason to limit your view to only current short term trends.

        Keep in mind that most innovation results from a desire to reduce costs.

        150 years ago only the wealthy could afford to light their homes at night, now the cost of doing so is almost inconsequential.

        Of course these folks, who suffer from even more government than we do, aren’t so lucky.

        • re: energy costs

          but you’re comparing the POSSIBILITY of energy costs going DOWN vs how MUCH investments will pay – at a time when returns on investments has virtually cut in half.

          which is the better bet? and if your bet is wrong – which one hurts you more?

          • but you’re comparing the POSSIBILITY of energy costs going DOWN vs how MUCH investments will pay – at a time when returns on investments has virtually cut in half.

            And we are comparing the POSSIBILITY of energy costs going up against a historical average covering 200 years of stock market performance.

            The key term here is *uncertainty*. The future of energy prices is *uncertain*, to a greater degree
            than the future of S&P 500 stocks.

            Reread John Dewey’s posts on the subject.

        • Actually, taking a longer view of historical energy costs shows that energy costs have decreased over time. There is no reason to limit your view to only current short term trends.</b.

          Actually, if you think about it you will find that the government's meddling in the energy sector have driven costs much higher than they need to be. Your electricity rates are as high as they are because of idiotic mandates and subsidies to the alternative energy sector. While there is a nice tailwind for utilities right now the negative cash flows and funding gaps in the shale sector threaten the sector in the future. With coal being prohibited and new nuclear construction nearly out of the question there will be serious issues down the road. For examples look to the UK.

          • looks like the US has fairly low-priced electricity compared to the rest of the world:

            Country/Territory US cents/kWh As of Sources
            Bhutan 1.88 to 4.40 March 23, 2012 BPC[6]
            Iran 2 to 19 July 1, 2011
            Pakistan 2.00 to 15.070 May 16, 2012 LESCOFESCO
            Ukraine 3.05 to 3.95 2011 [10][19]
            Thailand 4.46 to 9.79 March 5, 2011 BOI
            Uzbekistan 4.95 2011 Stroyka.uz[19]
            Argentina 5.74* 2006 [4][2]
            Vietnam 6.20 to 10.01 2011 Reuters
            Taiwan 7 to 17 October 1, 2008 [8]
            Jamaica 7.35 to 16.80 June 1, 2011 JPSCo[13]
            Malaysia 7.42 December 1, 2007 ST[15]
            China 7.5 to 10.7 May 17, 2012 [7]
            Dubai 7.62 2011 DEWA[9]
            South Africa 8 to 16 November 5, 2012 Eskom
            United States 8 to 17 ; 37*** September 1, 2012 EIA[20]
            Iceland 9 to 10 June 1, 2012 OR[11]
            Russia 9.58 January 1, 2012 Mosenergosbyt
            Perú 10.44 2007 PTL[17]
            Canada 10.78 January 1, 2011 PEI
            Moldova 11.11 April 1, 2011 RUF[citation needed]
            Hong Kong
            (HK Is.) 12.04 January 1, 2012 HEC[10]
            Turkey 13.1 July 1, 2011 TEDAS
            Uruguay 14.47 to 22.89 February 18, 2011 UTE
            Israel 15* January 1, 2012 IEC[12]
            Bulgaria 16.33 July 1, 2012 DKER
            Croatia 17.55 July 1, 2008 HEP
            United Kingdom 17.85 September 1, 2012 EEP[5]EP
            Latvia 18.25 June 1, 2012 Latvenergo[14]
            New Zealand 19.15 April 19, 2012
            Mexico 19.28** August 22, 2012 CFE[16]
            France 19.39 November 1, 2011 EEP[5]
            Finland 20.65 November 1, 2011 EEP[5]
            Australia 22 to 46.56 August 23, 2012 [5],[6]
            Singapore 22.24 July 4, 2012 [18]
            Spain 22.73 July 1, 2012 Iberdrola,energy.eu
            Chile 23.11 January 1, 2011 Chilectra[8]
            Hungary 23.44 November 1, 2011 EEP[5]
            Portugal 25.25 November 1, 2011 EEP[5]
            Guyana 26.80 April 1, 2012 GPL
            Sweden 27.10 November 1, 2011 EEP
            Ireland 28.36 November 1, 2011 EEP[5]
            Italy 28.39 November 1, 2011 EEP[5]
            Netherlands 28.89 November 1, 2011 EEP[5]
            Belgium 29.06 November 1, 2011 EEP[5]
            Philippines 30.46 March 1, 2010 [7]
            Germany 31.41 May 31, 2012 EEP
            Brazil 34.18 January 1, 2011 ANEEL
            Denmark 40.38 November 1, 2011

            http://en.wikipedia.org/wiki/Electricity_pricing#Price_comparison

          • looks like the US has fairly low-priced electricity compared to the rest of the world:..

            Of course it does. The US used to be reasonable and did not over-regulate as most of the rest of the world did.

          • Vangel

            Actually, if you think about it you will find that the government’s meddling in the energy sector have driven costs much higher than they need to be.

            Absolutely. And I see you are cursed with the same slow shift key problem I have. The preview function with Blogger was MOST helpful.

            It’s possible I suffer from slow shift key FINGER, but I prefer to blame the keyboard.

  15. Truly said and i agree with you. With the advancement of technology the electronic appliances are becoming cheaper. Even the competition in the market have led to better products, greater energy efficiency and too at low prices.

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