IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this article

Labeling energy cost on light bulbs lowers implicit discount rates

Listed author(s):
  • Min, Jihoon
  • Azevedo, Inês L.
  • Michalek, Jeremy
  • de Bruin, Wändi Bruine
Registered author(s):

    Lighting accounts for nearly 20% of overall U.S. electricity consumption and 18% of U.S. residential electricity consumption. A transition to alternative energy-efficient technologies could reduce this energy consumption considerably. To quantify the influence of factors that drive consumer choices for light bulbs, we conducted a choice-based conjoint field experiment with 183 participants. We estimated discrete choice models from the data, and found that politically liberal consumers have a stronger preference for compact fluorescent lighting technology and for low energy consumption. Greater willingness to pay for lower energy consumption and longer life was observed in conditions where estimated operating cost information was provided. Providing estimated annual cost information to consumers reduced their implicit discount rate by a factor of five, lowering barriers to adoption of energy efficient alternatives with higher up-front costs; however, even with cost information provided, consumers continued to use implicit discount rates of around 100%, which is larger than that experienced for other energy technologies.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://www.sciencedirect.com/science/article/pii/S092180091300325X
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Article provided by Elsevier in its journal Ecological Economics.

    Volume (Year): 97 (2014)
    Issue (Month): C ()
    Pages: 42-50

    as
    in new window

    Handle: RePEc:eee:ecolec:v:97:y:2014:i:c:p:42-50
    DOI: 10.1016/j.ecolecon.2013.10.015
    Contact details of provider: Web page: http://www.elsevier.com/locate/ecolecon

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    as
    in new window


    1. Anderson, C Dennis & Claxton, John D, 1982. " Barriers to Consumer Choice of Energy Efficient Products," Journal of Consumer Research, Oxford University Press, vol. 9(2), pages 163-170, September.
    2. Brown, Marilyn A., 2001. "Market failures and barriers as a basis for clean energy policies," Energy Policy, Elsevier, vol. 29(14), pages 1197-1207, November.
    3. Vredin Johansson, Maria & Heldt, Tobias & Johansson, Per, 2006. "The effects of attitudes and personality traits on mode choice," Transportation Research Part A: Policy and Practice, Elsevier, vol. 40(6), pages 507-525, July.
    4. Cristian Domarchi & Alejandro Tudela & Angélica González, 2008. "Effect of attitudes, habit and affective appraisal on mode choice: an application to university workers," Transportation, Springer, vol. 35(5), pages 585-599, August.
    5. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521766555, December.
    6. Dreyfus, Mark K & Viscusi, W Kip, 1995. "Rates of Time Preference and Consumer Valuations of Automobile Safety and Fuel Efficiency," Journal of Law and Economics, University of Chicago Press, vol. 38(1), pages 79-105, April.
    7. Jerry A. Hausman, 1979. "Individual Discount Rates and the Purchase and Utilization of Energy-Using Durables," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 33-54, Spring.
    8. Shane Frederick & George Loewenstein & Ted O'Donoghue, 2002. "Time Discounting and Time Preference: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 351-401, June.
    9. Choo, Sangho & Mokhtarian, Patricia L., 2004. "What type of vehicle do people drive? The role of attitude and lifestyle in influencing vehicle type choice," Transportation Research Part A: Policy and Practice, Elsevier, vol. 38(3), pages 201-222, March.
    10. Eleanor McDonnell Feit & Mark A. Beltramo & Fred M. Feinberg, 2010. "Reality Check: Combining Choice Experiments with Market Data to Estimate the Importance of Product Attributes," Management Science, INFORMS, vol. 56(5), pages 785-800, May.
    11. Blumstein, Carl & Krieg, Betsy & Schipper, Lee & York, Carl, 1980. "Overcoming social and institutional barriers to energy conservation," Energy, Elsevier, vol. 5(4), pages 355-371.
    12. Meier, Alan K. & Whittier, Jack, 1983. "Consumer discount rates implied by purchases of energy-efficient refrigerators," Energy, Elsevier, vol. 8(12), pages 957-962.
    13. Min Ding & Rajdeep Grewal & John Liechty, 2005. "Incentive-aligned conjoint analysis," Framed Field Experiments 00139, The Field Experiments Website.
    14. Henry Ruderman & Mark D. Levine & James E. McMahon, 1987. "The Behavior of the Market for Energy Efficiency in Residential Appliances Including Heating and Cooling Equipment," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 101-124.
    15. Dermot Gately, 1980. "Individual Discount Rates and the Purchase and Utilization of Energy-Using Durables: Comment," Bell Journal of Economics, The RAND Corporation, vol. 11(1), pages 373-374, Spring.
    16. Teisl, Mario F. & Rubin, Jonathan & Noblet, Caroline L., 2008. "Non-dirty dancing? Interactions between eco-labels and consumers," Journal of Economic Psychology, Elsevier, vol. 29(2), pages 140-159, April.
    17. Mau, Paulus & Eyzaguirre, Jimena & Jaccard, Mark & Collins-Dodd, Colleen & Tiedemann, Kenneth, 2008. "The 'neighbor effect': Simulating dynamics in consumer preferences for new vehicle technologies," Ecological Economics, Elsevier, vol. 68(1-2), pages 504-516, December.
    18. Jaffe, Adam B. & Stavins, Robert N., 1994. "The energy-efficiency gap What does it mean?," Energy Policy, Elsevier, vol. 22(10), pages 804-810, October.
    19. Houston, Douglas A, 1983. " Implicit Discount Rates and the Purchase of Untried, Energy-Saving Durable Goods," Journal of Consumer Research, Oxford University Press, vol. 10(2), pages 236-246, September.
    20. David Hensher & William Greene, 2003. "The Mixed Logit model: The state of practice," Transportation, Springer, vol. 30(2), pages 133-176, May.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:eee:ecolec:v:97:y:2014:i:c:p:42-50. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)

    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 references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.