The Effect of Providing Monetary Information on Energy Savings for Household Appliances: A Field Trial in Spain

Abstract

Energy labels are one of the most widely used policies in the European Union for increasing the energy efficiency of household appliances. However, their effectiveness in promoting energy-efficient purchases has sometimes been called into question. One of the reasons for this is that consumers may have difficulties in fully understanding the energy consumption information provided on labels (in kilowatt-hour per year). Some authors argue that to avoid this problem energy consumption information should be converted into monetary information. We analyse whether providing monetary information on lifetime energy savings can significantly increase purchases of energy-efficient appliances. To that end, a field experiment was carried out with small retailers in Spain. The experiment involved three types of appliances: washing machines, fridges and dishwashers. The impact of monetary information on actual purchases of appliances was tested in different ways: (i) by including a monetary label to display energy savings during the lifetime of the product; (ii) by the monetary information provided by sales staff; and (iii) by combining (i) and (ii). We find that the effectiveness of providing monetary information depends on the appliance and the specific way in which the information is provided. For washing machines, providing monetary information through a monetary label seems effective in promoting the purchase of highly energy-efficient appliances. However, for fridges, both monetary information provided by staff alone and the combination of the monetary label and information from sales staff seem to be effective in promoting purchases of A+++ fridges. Surprisingly, no effect is found for dishwashers.