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

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

doi:10.1007/s40888-016-0042-2

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.

Highlights

Since the 1980s, and more so after the Rio Earth Summit in 1992, ‘eco-labels’ have become popular policy measures aimed at encouraging consumers to adopt environmentally friendly consumption (Horne 2009, p. 179), a pressing need in the context of increased commitment to tackle climate change
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
Since the lab is based on a convenience sample, it is worth discussing some of the prevalent features: 55.56 % of the participants are female, 63.95 % have less than 22 years old, 57.53 % have tertiary education, 15.80 % have never bought a car, 5.19 % is married

Summary

Introduction

Since the 1980s, and more so after the Rio Earth Summit in 1992, ‘eco-labels’ have become popular policy measures aimed at encouraging consumers to adopt environmentally friendly consumption (Horne 2009, p. 179), a pressing need in the context of increased commitment to tackle climate change. 179), a pressing need in the context of increased commitment to tackle climate change. Such labels are designed to offset the information asymmetry between manufacturers/providers and consumers in various domains, from domestic energy supply (Momsen and Stoerk 2014), to motor vehicles (Teisl et al 2008), wine products (Delmas and Grant 2014), and food (Vlaeminck et al 2014). Policy instruments such as ‘eco-labels’ must be based on robust evidence This pressing need for evaluation is further required by the debate on libertarian paternalism (Rebonato 2014; Thaler and Sunstein 2003), since labels are typically discussed as tools for nudging consumers. The ‘nudge’ strategy (Thaler and Sunstein 2009; Sunstein 2013) is a new trend in evidence based policy making that draws upon behavioural insights in the design of public policy interventions (Codagnone et al 2014a; Sousa Lourenco et al 2016; van Bavel et al 2013, 2015)

Objectives

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Results

Conclusion