Consumer Inattention, Heuristic Thinking and the Role of Energy Labels
30 Pages Posted: 18 Jun 2016 Last revised: 17 Feb 2017
Date Written: January 30, 2017
Energy labels have been introduced in many countries to increase consumers’ attention to energy use in purchase decisions of durables. In a discrete-choice experiment among about 5,000 households, we implement randomized information treatments to explore how energy labels influence purchasing decisions. Our results show that adding annual operating cost information to the EU energy label promotes the choice of energy-efficient durables. In addition, we find that a majority of participants value efficiency classes beyond the economic value of the underlying energy use differences. Our results further indicate that displaying operating cost affects choices through two distinct channels: it increases the attention to operating cost and reduces the valuation of efficiency class differences.
Keywords: Environmental certification, discrete choice experiment, energy efficiency, energy-using durables
JEL Classification: D03, D12, D83, Q48, Q50
Suggested Citation: Suggested Citation