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Does energy efficiency label alter consumersf purchase decision? A latent class approach on Shanghai data

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Author Info

  • Junyi Shen

    (OSIPP,Osaka University)

  • Tatsuyoshi Saijo

    (ISER,Osaka University)

Abstract

In this paper we apply hypothetical choice experiments through a field survey in Shanghai of China to examine whether China Energy Efficiency Label affects consumersf choices of air conditioner and refrigerator. A latent class approach is used to observe both heterogeneities among the respondents and product brands. The results suggest that the effect of energy efficiency label on consumersf preferences is twofold. First, more energy efficient air conditioners or refrigerators are preferred by consumers, no matter whether they are with foreign brands or domestic brands and whether they are new or second-hand. Second, energy efficiency label per se is recognized by consumers. In addition, presence of a (hypothetical) label that indicates the electricity billfs difference comparing to a standard model is significantly preferred by the respondents in most of the cases, suggesting that more information provided to consumers makes them much happier. Finally, the class probability weighted willingness to pay values for one rank upgrading in energy efficiency of refrigerator are higher than those of air conditioner, implying that consumers have an incentive to pay more for appliances used more frequently.

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File URL: http://www.osipp.osaka-u.ac.jp/archives/DP/2007/DP2007E005.pdf
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Bibliographic Info

Paper provided by Osaka School of International Public Policy, Osaka University in its series OSIPP Discussion Paper with number 07E005.

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Length: 32 pages
Date of creation: May 2007
Date of revision:
Handle: RePEc:osp:wpaper:07e005

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Related research

Keywords: Energy efficiency label; Consumersf purchase decision; Latent class model; Willingness to pay; China;

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References

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Citations

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Cited by:
  1. Simona Rasciute & Eric J Pentecost, 2008. "The Latent Heterogeneity in Investment Location Choices of Multinational Enterprises," Discussion Paper Series 2008_16, Department of Economics, Loughborough University, revised Dec 2008.
  2. Doherty, Edel & Campbell, Danny & Hynes, Stephen & van Rensburg, Thomas, 2012. "Labelling effects in discrete choice experiments," Working Papers 148831, Socio-Economic Marine Research Unit, National University of Ireland, Galway.
  3. Junyi Shen, 2008. "Understanding the determinants of consumersf willingness to pay for eco-labeled products: An empirical analysis of the China Environmental Label," OSIPP Discussion Paper 08E001, Osaka School of International Public Policy, Osaka University.
  4. Junyi Shen & Kazuhito Ogawa & Hiromasa Takahashi, 2014. "Examining the Tradeoff between Fixed Pay and Performance-related Pay: A Choice Experiment Approach," Discussion Paper Series DP2014-01, Research Institute for Economics & Business Administration, Kobe University.
  5. Stefanie Heinzle, 2012. "Disclosure of Energy Operating Cost Information: A Silver Bullet for Overcoming the Energy-Efficiency Gap?," Journal of Consumer Policy, Springer, vol. 35(1), pages 43-64, March.

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