Enhancing the informational nudge of energy labels: Evidence from a DCE in New Delhi

29 Pages Posted: 22 Mar 2021

See all articles by Charu Grover

Charu Grover

Shaheed Bhagat Singh College, University of Delhi; Jawaharlal Nehru University, Centre for International Trade and Development, Students

Sangeeta Bansal

Jawaharlal Nehru University - Centre for International Trade and Development

Adan L. Martinez-Cruz

Department of Forest Economics, SLU; CERE; ETH Zürich - Centre for Energy Policy and Economics (CEPE)

CERE Center for Environmental and Resource Economics

CERE

Date Written: March 1, 2021

Abstract

India's contribution to global CO2 emissions makes it a priority case for policy makers worldwide. The Indian government is considering the adoption of energy labels for new passenger cars to tackle CO2 emissions. This paper's first aim is to asses New Delhi's car buyers' preferences for cars displaying energy labels. To do so, a discrete choice experiment (DCE) has been designed to document both WTP for energy efficiency (212 USD for one kilometer per liter) and WTP for the best efficiency label (4.93 thousand USD). The informational nudge embedded in a labeling system may not be enough to boost uptake of efficient cars. Thus this paper investigates the potential of combining a labeling system and car driving restrictions. Via a split-sample approach, this paper documents an increase of 2.55 thousand USD in stated WTP for the best efficiency label. This number can be interpreted as reflecting the costs imposed by the driving restrictions on car drivers. Under this interpretation, 2.55 thousand USD fall within the range of estimations reported in previous studies. The results in this paper suggest that a combination of driving restrictions and a labeling system may deliver an increase in energy efficient cars in New Delhi.

Keywords: Energy labeling system, driving restrictions, willingness to pay, discrete choice experiment, split-sample approach, New Delhi.

JEL Classification: Q48, Q5

Suggested Citation

Grover, Charu and Bansal, Sangeeta and Martinez-Cruz, Adan L. and Center for Environmental and Resource Economics, CERE, Enhancing the informational nudge of energy labels: Evidence from a DCE in New Delhi (March 1, 2021). Available at SSRN: https://ssrn.com/abstract=3795176 or http://dx.doi.org/10.2139/ssrn.3795176

Charu Grover

Shaheed Bhagat Singh College, University of Delhi ( email )

Sheikh Sarai
Phase II
New Delhi, 110017
India
9999391333 (Phone)

Jawaharlal Nehru University, Centre for International Trade and Development, Students ( email )

New Delhi, Delhi 110067
India

Sangeeta Bansal

Jawaharlal Nehru University - Centre for International Trade and Development ( email )

School of International Studies
New Delhi, Delhi 110067
India

Adan L. Martinez-Cruz (Contact Author)

Department of Forest Economics, SLU ( email )

S-901 83 Umea
Sweden

HOME PAGE: http://https://www.researchgate.net/profile/Adan_Martinez-Cruz

CERE ( email )

Almas Allé 10
Umeå, 750 07
Sweden

ETH Zürich - Centre for Energy Policy and Economics (CEPE) ( email )

8092 Zurich
Switzerland
+41 44 633 80 97 (Phone)

HOME PAGE: http://www.eepe.ethz.ch/people/madan

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
22
Abstract Views
148
PlumX Metrics