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Appliance energy labels and consumer heterogeneity: A latent class approach based on a discrete choice experiment in China

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  • Zha, Donglan
  • Yang, Guanglei
  • Wang, Wenzhong
  • Wang, Qunwei
  • Zhou, Dequn

Abstract

Given the growing concerns about environmental protection, a focus on energy label behavior is of particular public interest, as labels can communicate to consumers the sustainability of products. Based on a discrete choice experiment, we measure consumers' awareness and attitudes regarding refrigerators and washing machines. A mixed logit model is specified to quantify the attributes consumers look for when choosing the two electrical appliances. In the latent class model, four classes are observed. The results of the study reveal that the energy label program in China is effective. However, consumers do not always choose the energy efficient appliances, and their failure to do so is often related to an energy efficiency gap. Interestingly, both the largest groups for the refrigerator (33.17%) and washing machine (36.6%) tend to prefer the two electrical appliances with the lowest price. Both are foreign brands, with low energy label and larger overall capacity. Consumers are also willing to pay more for an improved energy grade label on the refrigerator (731.16 yuan) than on the washing machine (424.76 yuan). Suggestions regarding how to increase the probability of consumers choosing energy efficient appliances are also given in this paper.

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  • Zha, Donglan & Yang, Guanglei & Wang, Wenzhong & Wang, Qunwei & Zhou, Dequn, 2020. "Appliance energy labels and consumer heterogeneity: A latent class approach based on a discrete choice experiment in China," Energy Economics, Elsevier, vol. 90(C).
    • Handle: RePEc:eee:eneeco:v:90:y:2020:i:c:s0140988320301791
    DOI: 10.1016/j.eneco.2020.104839
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    11. Gongyi Zhang & Chang Zhang & Hongguang Nie, 2021. "An Overview of China’s Energy Labeling Policy Portfolio: China’s Contribution to Addressing the Global Goal of Sustainable Development," SAGE Open, , vol. 11(1), pages 21582440209, January.
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    15. 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).
    16. Dorothée Charlier, 2021. "Explaining the energy performance gap in buildings with a latent profile analysis," Post-Print hal-03894155, HAL.
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    19. Amaia de Ayala & María del Mar Solà, 2022. "Assessing the EU Energy Efficiency Label for Appliances: Issues, Potential Improvements and Challenges," Energies, MDPI, vol. 15(12), pages 1-25, June.

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    More about this item

    Keywords

    Energy label; Energy efficient appliances; Discrete choice experiment; Latent class model; Willingness to pay;
    All these keywords.

    JEL classification:

    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • P18 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Energy; Environment
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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