Energy literacy, income, and choice of energy-efficient appliances: a discrete choice experiment and welfare analysis in eight European countries

Using demographically representative discrete choice experiments on refrigerator purchase decisions in eight European countries (France, Germany, Italy, Poland, Romania, Spain, Sweden, United Kingdom), we investigate individual preferences for energy class, purchase price, warranty, size, customer rating and a rebate for efficient appliances. In particular, we allow preferences for energy class to vary with energy literacy and with income. Further, we investigate the welfare effects of a phase-out of energy-inefficient appliances on consumers, thereby distinguishing between high- and low-income households. We find energy labels to be more effective for customers with a higher energy literacy. We further find that welfare losses associated with a phase-out of inefficient appliances are typically higher for participants with low levels of energy literacy but not necessarily for households with low levels of income. Rebates for energy-efficient refrigerators may mitigate those welfare losses but would typically lead to undesirable distributional effects.