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Visual representations of energy labels and implications for decision making

abstract Markets for environmental goods, such as energy-efficient appliances, are typically characterized by information asymmetries between suppliers and consumers. Third-party certified eco-labeling schemes can be introduced as a means to overcome such information asymmetries and to increase trust in the validity of the environmental information.

Energy efficiency labels are important examples of eco-labels which play a significant role in overcoming these asymmetries, with positive implications for effective consumer decisions, competitive advantage for suppliers of energy-efficient goods, and for societal goals such as mitigating climate change. Energy efficiency labels can be used to provide information to consumers and enable them to compare the energy efficiency of appliances on a equitable basis by acting as an indicator showing how energy efficient the product is (Mahlia et al. 2002, Grankvist and Biel 2006). Furthermore, such labels facilitate manufacturers to gain a competitive advantage by producing environmentally friendly products (Thogersen 2000) and therefore act as an especially effective and essential element in any government´s portfolio of energy-efficient policies (Wiel and McMahon 005).

In light of the many forms of label designs that exist worldwide there is a scarcity of research investigating how different systems influence the energy-efficient purchase behavior of consumers and deriving implications for the design of effective labels. Empirical data regarding the impact of energy labels on consumer´s response is unusually limited and there is a huge lack of studies of how consumers recognize, perceive, understand and consider the information on the labels in their purchase decisions. However, knowledge concerning the linkage of consumer behavior and labeling is very important for further replication and expansion of different labeling programs (Huh 1999).

The purpose of the research is to provide empirical evidence on the effect of different kinds of labeling schemes on consumer decisions regarding investigated choices for different product categories. The research will draw on theories from several disciplines, e.g. information economics, behavioral economics and information visualization. Consumer decision processes concerning the linkage of consumer behavior and different labeling formats will be investigated.

This research is financed by a fellowship for prospective researchers of the Swiss National Science Foundation.
   
keywords Energy efficiency labels, consumer behavior, behavioral economics, information economics, energy consumption, energy costs
   
partner
type dissertation project
status completed
start of project 2011
end of project 2011
additional informations
topics Energy efficiency labels, consumer behavior, behavioral economics, information economics, energy consumption, energy costs
methods Discrete choice analysis, eye tracking (to be defined)
contact Stefanie Heinzle