The Analytical Economist; October 1994; Scientific American Magazine; by Wallick; 1 Page(s)
For environmental economists, compact fluorescent lights are among the greatest inventions since fiberglass insulation or doubleglazed windows. Anyone who installs one saves money, cuts air pollution and reduces the potential risk of global warming in one fell swoop. Furthermore, conventional lightbulbs typically last less than a year, so compact fluorescents could displace incandescents relatively rapidly (in contrast with other kinds of technology, where it may take 10 years or more for old models to wear out). Yet these miraculous devices have captured a mere 2 percent of the lightbulb market; roughly 10 billion conventional incandescent bulbs still find their way into light sockets every year. Lighting specialists report no shortage of the new lamps, so supply seems to be close to demand.
How could something that appears to be so obviously superior have such modest marketplace success? The answer turns out to be one statistical quirk and two large doses of economic reality. Least important is the quirk: unit sales are a misleading measure because a compact fluorescent lamp (CFL) lasts about as long as 10 incandescents; if half the light sockets in the world held CFLs, the lights would still account for only about 5 percent of bulbs sold. A similar paradox occurred early in the automobile age: tire sales plummeted when more durable models appeared.