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Information inefficiency and willingness-to-pay for energy-efficient technology: A stated preference approach for China Energy Label

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  • Zhou, Hui
  • Bukenya, James O.

Abstract

The paper examines the extent to which consumers' willingness-to-pay for energy-efficient room air conditioners may be altered by correcting the information inefficiency on the China Energy Label. The data are collected from a discrete choice experiment with two alternatives (variable-speed and constant-speed room air conditioners) characterized by attributes of brand, purchase price and energy grade. Three versions of the questionnaires with choice sets differing only in energy consumption indicators were distributed randomly to 1602 potential consumers in Nanjing, China and a sample of 1569 was obtained after dropping missing data. The analysis with multinomial and mixed logit models reveal that the price premium that consumers are willing to pay for a variable-speed room AC over a constant-speed room AC increases significantly when energy consumption information becomes comparable and additional energy-related information is provided. Furthermore, the impact of information on WTP varies under different energy-saving scenarios. It is suggested that China Energy Label should correct information inefficiency by adopting same energy indicators for room ACs with different technologies and providing energy consumption information based on different climate zones.

Suggested Citation

  • Zhou, Hui & Bukenya, James O., 2016. "Information inefficiency and willingness-to-pay for energy-efficient technology: A stated preference approach for China Energy Label," Energy Policy, Elsevier, vol. 91(C), pages 12-21.
    • Handle: RePEc:eee:enepol:v:91:y:2016:i:c:p:12-21
    DOI: 10.1016/j.enpol.2015.12.040
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