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Energy labels in the European Union: Consumer inattention and producer responses

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  • Kesselring, Anne

Abstract

This paper studies the effect of mandatory eco-labels for durable goods using a bunching design. I exploit discontinuities in the European energy label for washing machines to document consumer inattention in response to the salient quality signal given by the label. The policy effect is driven by adjustments in both supply and demand, which leads to a sales distribution that is strongly concentrated around the label thresholds. Market transformation occurs not only through a local shift in existing segments of the product space, but also through the build-up of a new market segment at the highest label threshold. Regarding price effects, I find no evidence of green premia and argue that competition is effective in preventing this for the case of the European Union.

Suggested Citation

  • Kesselring, Anne, 2025. "Energy labels in the European Union: Consumer inattention and producer responses," Energy Economics, Elsevier, vol. 144(C).
    • Handle: RePEc:eee:eneeco:v:144:y:2025:i:c:s0140988325000982
    DOI: 10.1016/j.eneco.2025.108275
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    More about this item

    Keywords

    Energy efficiency; Inattention; Bunching; Eco-labels; Quality disclosure; Household appliances;
    All these keywords.

    JEL classification:

    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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