Encouraging Energy Efficiency: Product Labels Activate Temporal Tradeoffs

Abstract

The current research presents the "10-year energy cost" label as an effective nudge to increase energy efficient choices by retail consumers. Its efficacy is demonstrated in both lab and field studies (Studies 1a and 1b) and compared to other energy labels (Studies 4 and 5). The current work proposes that it is effective partly because many consumers have a latent "long-term dollar cost-reduction" goal. Normally, when consumers purchase energy using products, they do not think about long-term costs. However, the "10-year energy cost" label activates this latent goal in the presence of an appropriate behavioral path to achieving the goal, increasing the proportion of energy efficient choices (Studies 3 and 4). Thus, this nudge is somewhat selective, having its greatest impact on consumers who self-report actively pursuing long-term cost reduction goals (Study 5).

Keywords: Product Labels, Attribute Framing, Inter-temporal Choice, Energy Paradox