There are many papers that have been published on energy efficiency standards and labels. However, a very limited number of articles on the subject have discussed the transformation of appliance energy efficiency in the market after the programs are implemented. This paper is an attempt to investigate the market transformation due to implementation of minimum energy efficiency standards and energy labels. Even though the paper only investigates room air conditioners as a case study, the method is also applicable for predicting market transformation for other household electrical appliances. (C) 2003 Elsevier Ltd. All rights reserved.