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Labels as nudges? An experimental study of car eco-labels

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  • Codagnone, Cristiano
  • Veltri, Giuseppe Alessandro
  • Bogliacino, Francesco
  • Lupiáñez-Villanueva, Francisco
  • Gaskell, George
  • Ivchenko, Andriy
  • Ortoleva, Pietro
  • Mureddu, Francesco

Abstract

This article presents the results of a laboratory experiment and an online multi-country experiment testing the effect of motor vehicle eco-labels on consumers. The laboratory study featured a discrete choice task and questions on comprehension, while the ten countries online experiment included measures of willingness to pay and comprehension. Labels focusing on fuel economy or running costs are better understood, and influence choice about money-related eco-friendly behaviour. We suggest that this effect comes through mental accounting of fuel economy. In the absence of a cost saving frame, we do not find a similar effect of information on CO2 emissions and eco-friendliness. Labels do not perform as well as promotional materials. By virtue of being embedded into a setting designed to capture the attention, the latter are more effective. We found also that large and expensive cars tend to be undervalued once fuel economy is highlighted.

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  • Codagnone, Cristiano & Veltri, Giuseppe Alessandro & Bogliacino, Francesco & Lupiáñez-Villanueva, Francisco & Gaskell, George & Ivchenko, Andriy & Ortoleva, Pietro & Mureddu, Francesco, 2016. "Labels as nudges? An experimental study of car eco-labels," LSE Research Online Documents on Economics 68683, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:68683
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    2. He, Shutong & Blasch, Julia & van Beukering, Pieter, 2022. "How does information on environmental emissions influence appliance choice? The role of values and perceived environmental impacts," Energy Policy, Elsevier, vol. 168(C).
    3. Galarraga, Ibon & Kallbekken, Steffen & Silvestri, Alessandro, 2020. "Consumer purchases of energy-efficient cars: How different labelling schemes could affect consumer response to price changes," Energy Policy, Elsevier, vol. 137(C).
    4. Aydin, Erdal & Correa, Santiago Bohórquez & Brounen, Dirk, 2019. "Energy performance certification and time on the market," Journal of Environmental Economics and Management, Elsevier, vol. 98(C).
    5. 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).
    6. E. Denny, 2022. "Long-term Energy Cost Labelling for Appliances: Evidence from a Randomised Controlled Trial in Ireland," Journal of Consumer Policy, Springer, vol. 45(3), pages 369-409, September.
    7. Charu Grover & Sangeeta Bansal & Adan L. Martinez-Cruz, "undated". "Influence of Social Network Effect and Incentive on Choice of Star Labeled Cars in India: A Latent Class Approach based on Choice Experiment," Centre for International Trade and Development, Jawaharlal Nehru University, New Delhi Discussion Papers 18-05, Centre for International Trade and Development, Jawaharlal Nehru University, New Delhi, India.
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    10. Bogliacino, Francesco & Charris, Rafael & Codagnone, Cristiano & Folkvord, Frans & Gaskell, George & Gómez, Camilo & Liva, Giovanni & Montealegre, Felipe, 2023. "Less is more: Information overload in the labelling of fish and aquaculture products," Food Policy, Elsevier, vol. 116(C).
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    More about this item

    Keywords

    Eco-label; Nudge; Willingness to pay; Fuel economy; Experiments; CO2 emission;
    All these keywords.

    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • D3 - Microeconomics - - Distribution
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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