Buzzword: Clunkernomics

What it means? This mashup of clunker and economics is inspired by the 2005 book Freakonomics: A Rogue Economist Explores the Hidden Side of Everything, by Steven Levitt and Stephen J. Dubner. The most notable example of clunkernomics is the Car Allowance Rebate Program, or cash for clunkers, which spurred car sales over its run last summer.

Why the buzz? Cash for clunkers has plenty of imitators in programs whose model consists of consumers trading in an old product for a new, presumably more-efficient, one. One next-gen example of clunkernomics is the $300 million State Energy Efficient Appliance Rebate Program. The federal government’s cash for clunkers for appliances initiative, details of which are still being worked out by the U.S. Department of Energy, will give you a rebate of up to $250 per appliance on the purchase Energy Star-qualified models. Note: You likely won’t have to trade in your old dishwasher, refrigerator, or washing machine when you buy a new one.

Private enterprise is dipping its toes into clunkernomics, too, including a program centered around lighting. Philadelphia-based LED Saving Solutions announced last week that it will offer a $10 rebate per lightbulb for high-efficiency LED bulbs. “We see this initiative as a way to take the momentum created by the federal government to a new level and make a dramatic impact in our collective goal to make America more energy independent,” said Charlie Szoradi, president of LED Saving Solutions.

As clunkernomics expands, perhaps “clunker hangover” will set in, and maybe the cash-for-clunkers model has jumped the shark. After all even a New York City FM-radio station has its own clunkers deal. The WPLJ Web site says, “The government thinks a clunker is an old beat up gas guzzler. But here at ‘PLJ a clunker is a terrible song that somehow became a hit!” After a clunker airs, the 25th caller wins $5,000. Recent musical clunkers include “Don’t Worry, Be Happy,” by Bobby McFerrin and “We Built This City,” by Jefferson Starship.

But Jack Hidary, the chairman of SmartTransportation.org who is credited as being the driver behind the automotive version of cash for clunkers, isn’t concerned. “I’m happy about all the copycats,” he says. “Let’s move our country away from rampant consumerism to a focus on the utility and the efficiency of products.”—Daniel DiClerico | e-mail | Twitter | Forums | Facebook

Essential reading: When you're ready to replace you're appliances, be sure to check out the free buying guides on our appliances hub and learn about the best places to buy appliances. Save up to $1,500 on your annual utility bills, read our reports on pellet stoves and solar water heaters, and find out which compact fluorescent lightbulbs top our ratings (available to subscribers).

Comments

[cat lover]

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