News

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

March 29, 2016

We are pleased to announce the publication of the article “Labels as nudges? An experimental study of car eco-labels” after the successful completion of the Study Testing CO2/Car labelling options and consumer information that forms part of earlier research projects conducted by Open Evidence Staff.

The 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.

It is suggested that this effect comes through mental accounting of fuel economy. In the absence of a cost saving frame, no similar effect of information on CO2 emissions and eco-friendliness was found. Labels do not perform as well as promotional materials. Being embedded into a setting, which is designed to capture the attention, the latter are more effective. It is also found that large and expensive cars tend to be undervalued once fuel economy is highlighted.

 

The article can be downloaded via IDEAS, Econ Papers and on the website of the National University of Colombia.