Consumer Inattention, Heuristic Thinking and the Role of Energy Labels

30 Pages Posted: 18 Jun 2016 Last revised: 17 Feb 2017

See all articles by Mark Andor

Mark Andor

RWI – Leibniz Institute for Economic Research

Andreas Gerster

RWI - Leibniz Institute for Economic Research

Stephan Sommer

RWI - Leibniz-Institute for Economic Research

Multiple version iconThere are 2 versions of this paper

Date Written: January 30, 2017

Abstract

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

Andor, Mark and Gerster, Andreas and Sommer, Stephan, Consumer Inattention, Heuristic Thinking and the Role of Energy Labels (January 30, 2017). Available at SSRN: https://ssrn.com/abstract=2795579 or http://dx.doi.org/10.2139/ssrn.2795579

Mark Andor

RWI – Leibniz Institute for Economic Research ( email )

Hohenzollernstr. 1-3
Essen, 45128
Germany

HOME PAGE: http://en.rwi-essen.de/mark-andor

Andreas Gerster (Contact Author)

RWI - Leibniz Institute for Economic Research ( email )

Hohenzollernstraße 1-3
Essen
Germany

Stephan Sommer

RWI - Leibniz-Institute for Economic Research ( email )

Hohenzollernstr. 1-3
Essen, 45128
Germany

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