The effect of life-cycle cost disclosure on consumer behavior: evidence from a field experiment with cooling appliances

Abstract

Theory suggests that providing consumers with an estimated life-cycle cost (LCC) may make them buy more energy-efficient household appliances in cases where energy efficiency is cost effective. This article evaluates the link between the provision of LCC and consumer behavior by using an online field experiment for cooling appliances. Internet users arriving at a commercially operating price comparison website were randomly assigned to two experimental groups, and the groups were exposed to different visual stimuli. The control group received regular product price information, whereas the treatment group was offered additional information about estimated operating cost and total LCC. Consumers’ click behavior was evaluated with multiple regression controlling for several product characteristics (n = 1,969 clicks). We find that LCC disclosure reduces the mean specific energy use of chosen cooling appliances by 2.5% (p < 0.01), making it a potentially interesting approach for environmental policy regarding the market transformation toward more energy-efficient household appliances. However, LCC disclosure also decreases the number of clicks from the price comparison website to final retailers by about 23% (p < 0.01), which makes it—in the format chosen here—undesirable from a business perspective. Therefore, future research should clarify under what (if any) conditions can monetary energy cost disclosure be associated with more positive effects for price comparison websites.