IDEAS home Printed from https://ideas.repec.org/p/tcr/wpaper/e166.html
   My bibliography  Save this paper

Consumers' Preferences for Energy-Efficient Air Conditioners in a Developing Country: A Discrete Choice Experiment Using Eco Labels

Author

Listed:
  • Miwa Nakai
  • Majah-Leah V. Ravago
  • Yoichi Miyaoka
  • Kiyoshi Saito
  • Toshi. H Arimura

Abstract

In this paper, we aim to examine consumer behaviour concerning energy-efficient appliances in the context of a developing country. As a case study, we use the Philippines, one of the earliest countries in Southeast Asia to introduce appliance test standards. We conducted face-to-face surveys of potential purchasers of air conditioners (ACs) in Metropolitan Manila, where the percentage of AC owners has increased as a result of economic growth. The survey includes choice experiment questions to estimate preferences for AC attributes, including purchase price, additional functions, country of manufacturer and energy efficiency information. In addition, we examine the types of information on eco labels that encourage consumers to choose an energy-efficient AC, including the default option of an energy efficiency ratio, estimated cost per hour or an energy star rating. Our choice experiment analysis reveals that energy-efficient ACs made by domestic manufacturers with smart functions are more likely to be chosen by consumers. We find that the probability of an energy-efficient AC being chosen can be increased by approximately 15% if the eco label uses an energy star rating rather than an energy efficiency ratio.

Suggested Citation

  • Miwa Nakai & Majah-Leah V. Ravago & Yoichi Miyaoka & Kiyoshi Saito & Toshi. H Arimura, 2022. "Consumers' Preferences for Energy-Efficient Air Conditioners in a Developing Country: A Discrete Choice Experiment Using Eco Labels," Working Papers e166, Tokyo Center for Economic Research.
    • Handle: RePEc:tcr:wpaper:e166
    as

    Download full text from publisher

    File URL: https://www.tcer.or.jp/wp/pdf/e166.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Kenneth Gillingham & Karen Palmer, 2014. "Bridging the Energy Efficiency Gap: Policy Insights from Economic Theory and Empirical Evidence," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 8(1), pages 18-38, January.
    2. Lucas W. Davis & Gilbert E. Metcalf, 2016. "Does Better Information Lead to Better Choices? Evidence from Energy-Efficiency Labels," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 3(3), pages 589-625.
    3. 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.
    4. Murray, Anthony G. & Mills, Bradford F., 2011. "Read the label! Energy Star appliance label awareness and uptake among U.S. consumers," Energy Economics, Elsevier, vol. 33(6), pages 1103-1110.
    5. Jain, Manisha & Rao, Anand B. & Patwardhan, Anand, 2018. "Appliance labeling and consumer heterogeneity: A discrete choice experiment in India," Applied Energy, Elsevier, vol. 226(C), pages 213-224.
    6. Rapson, David, 2014. "Durable goods and long-run electricity demand: Evidence from air conditioner purchase behavior," Journal of Environmental Economics and Management, Elsevier, vol. 68(1), pages 141-160.
    7. Mahlia, T.M.I. & Saidur, R., 2010. "A review on test procedure, energy efficiency standards and energy labels for room air conditioners and refrigerator-freezers," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(7), pages 1888-1900, September.
    8. Ward, David O. & Clark, Christopher D. & Jensen, Kimberly L. & Yen, Steven T. & Russell, Clifford S., 2011. "Factors influencing willingness-to-pay for the ENERGY STAR® label," Energy Policy, Elsevier, vol. 39(3), pages 1450-1458, March.
    9. Richard G. Newell & Juha Siikamäki, 2014. "Nudging Energy Efficiency Behavior: The Role of Information Labels," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 1(4), pages 555-598.
    10. Anderson, C Dennis & Claxton, John D, 1982. "Barriers to Consumer Choice of Energy Efficient Products," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 9(2), pages 163-170, September.
    11. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74(2), pages 132-132.
    12. Ravago, Majah-Leah V. & Brucal, Arlan Zandro & Roumasset, James & Punongbayan, Jan Carlo, 2019. "The role of power prices in structural transformation: Evidence from the Philippines," Journal of Asian Economics, Elsevier, vol. 61(C), pages 20-33.
    13. 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.
    14. Zhang, Yixiang & Tao, Wenwen, 2020. "Will energy efficiency affect appliance price? An empirical analysis of refrigerators in China based on hedonic price model," Energy Policy, Elsevier, vol. 147(C).
    15. Trajtenberg, Manuel, 1989. "The Welfare Analysis of Product Innovations, with an Application to Computed Tomography Scanners," Journal of Political Economy, University of Chicago Press, vol. 97(2), pages 444-479, April.
    16. Murray, Anthony G. & Mills, Bradford F., 2011. "Read the Label! Energy Star Appliance Awareness and Uptake Among U.S. Consumers," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103328, Agricultural and Applied Economics Association.
    17. Sébastien Houde, 2018. "How consumers respond to product certification and the value of energy information," RAND Journal of Economics, RAND Corporation, vol. 49(2), pages 453-477, June.
    18. Sahakian, Marlyne D., 2011. "Understanding household energy consumption patterns: When "West Is Best" in Metro Manila," Energy Policy, Elsevier, vol. 39(2), pages 596-602, February.
    19. Toshi H. Arimura & Makoto Sugino, 2021. "Energy‐Related Environmental Policy and Its Impacts on Energy Use in Asia," Asian Economic Policy Review, Japan Center for Economic Research, vol. 16(1), pages 44-61, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Giraudet, Louis-Gaëtan, 2020. "Energy efficiency as a credence good: A review of informational barriers to energy savings in the building sector," Energy Economics, Elsevier, vol. 87(C).
    2. Henningsen, Geraldine & Wiese, Catharina, 2019. "Do Household Characteristics Really Matter? A Meta-Analysis on the Determinants of Households’ Energy-Efficiency Investments," MPRA Paper 101701, University Library of Munich, Germany.
    3. Olsthoorn, Mark & Schleich, Joachim & Guetlein, Marie-Charlotte & Durand, Antoine & Faure, Corinne, 2023. "Beyond energy efficiency: Do consumers care about life-cycle properties of household appliances?," Energy Policy, Elsevier, vol. 174(C).
    4. Stadelmann, Marcel & Schubert, Renate, 2018. "How Do Different Designs of Energy Labels Influence Purchases of Household Appliances? A Field Study in Switzerland," Ecological Economics, Elsevier, vol. 144(C), pages 112-123.
    5. Jain, Manisha & Rao, Anand B. & Patwardhan, Anand, 2018. "Appliance labeling and consumer heterogeneity: A discrete choice experiment in India," Applied Energy, Elsevier, vol. 226(C), pages 213-224.
    6. Mahirah Kamaludin & Muhd Azrin Shah Razali & Nazatul Faizah Haron & A. A. Azlina, 2021. "Energy Efficiency Labelling: Investigating Students Preferences and Awareness on the Energy-efficient Electrical Appliances in Hostel," International Journal of Energy Economics and Policy, Econjournals, vol. 11(2), pages 300-308.
    7. Mitsutsugu Hamamoto, 2023. "Estimating consumers’ discount rates in energy-saving investment decisions: a comparison of revealed and stated approaches," SN Business & Economics, Springer, vol. 3(7), pages 1-19, July.
    8. Schleich, Joachim & Faure, Corinne & Guetlein, Marie-Charlotte & Tu, Gengyang, 2020. "Conveyance, envy, and homeowner choice of appliances," Energy Economics, Elsevier, vol. 89(C).
    9. Louis-Gaëtan Giraudet, 2018. "Energy efficiency as a credence good: A review of informational barriers to building energy savings," Working Papers 2018.07, FAERE - French Association of Environmental and Resource Economists.
    10. Kiso, Takahiko & Chan, H. Ron & Arino, Yosuke, 2022. "Contrasting effects of electricity prices on retrofit and new-build installations of solar PV: Fukushima as a natural experiment," Journal of Environmental Economics and Management, Elsevier, vol. 115(C).
    11. Spurlock, C. Anna & Fujita, K. Sydny, 2022. "Equity implications of market structure and appliance energy efficiency regulation," Energy Policy, Elsevier, vol. 165(C).
    12. Jacobsen, Grant D., 2015. "Do energy prices influence investment in energy efficiency? Evidence from energy star appliances," Journal of Environmental Economics and Management, Elsevier, vol. 74(C), pages 94-106.
    13. Cattaneo, Cristina, 2018. "Internal and External Barriers to Energy Efficiency: Made-to-Measure Policy Interventions," CSI: Climate and Sustainable Innovation 269536, Fondazione Eni Enrico Mattei (FEEM).
    14. Faure, Corinne & Guetlein, Marie-Charlotte & Schleich, Joachim, 2021. "Effects of rescaling the EU energy label on household preferences for top-rated appliances," Energy Policy, Elsevier, vol. 156(C).
    15. Giovanna d’Adda & Yu Gao & Massimo Tavoni, 2022. "A randomized trial of energy cost information provision alongside energy-efficiency classes for refrigerator purchases," Nature Energy, Nature, vol. 7(4), pages 360-368, April.
    16. He, Shutong & Blasch, Julia & van Beukering, Pieter & Wang, Junfeng, 2022. "Energy labels and heuristic decision-making: The role of cognition and energy literacy," Energy Economics, Elsevier, vol. 114(C).
    17. Schleich, Joachim & Durand, Antoine & Brugger, Heike, 2021. "How effective are EU minimum energy performance standards and energy labels for cold appliances?," Energy Policy, Elsevier, vol. 149(C).
    18. Hunt Allcott & Richard L. Sweeney, 2017. "The Role of Sales Agents in Information Disclosure: Evidence from a Field Experiment," Management Science, INFORMS, vol. 63(1), pages 21-39, January.
    19. Muhammad Azrin Shah Razali & Mahirah Kamaludin & A.A. Azlina, 2022. "Consumer Preference for Energy Label in the Purchase Decision of Refrigerator: A Discrete Choice Experiment Approach in the East Coast, Malaysia," International Journal of Energy Economics and Policy, Econjournals, vol. 12(3), pages 441-450, May.
    20. Keramitsoglou, Kiriaki M. & Mellon, Robert C. & Tsagkaraki, Maria I. & Tsagarakis, Konstantinos P., 2020. "Designing a logo for renewable energy sources with public participation: Empirical evidence from Greece," Renewable Energy, Elsevier, vol. 153(C), pages 1205-1218.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tcr:wpaper:e166. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/tctokjp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.