Labels as Nudges? An Experimental Study of Car Eco-Labels
Documentos FCE-CID Escuela de Economía No. 69
134 Pages Posted: 1 Apr 2016
Date Written: March 16, 2016
This article presents the results of a laboratory experiment and an online multi-country experiment testing the effect of motor vehicle eco-labels on consumers. The laboratory study featured a discrete choice task and questions on comprehension, while the ten countries online experiment included measures of willingness to pay and comprehension. Labels focusing on fuel economy or running costs are better understood, and influence choice about money-related eco-friendly behaviour. We suggest that this effect comes through mental accounting of fuel economy. In the absence of a cost saving frame, we do not find a similar effect of information on CO2 emissions and eco-friendliness. Labels do not perform as well as promotional materials. Being embedded into a setting, which is designed to capture the attention, the latter are more effective. We found also that large and expensive cars tend to be undervalued once fuel economy is highlighted.
Keywords: eco-label; nudge; willingness to pay; fuel economy; experiments
JEL Classification: C9, D3, Q56, Q58
Suggested Citation: Suggested Citation