Label it and they will buy? The case of energy efficient class-A appliances

Panel: Panel 4. Residential and commercial sectors: delivering lower energy use in buildings

Authors:
Joachim Schleich, Fraunhofer Institute for Systems and Innovation Research, (Fraunhofer ISI), Germany
Bradford F. Mills, Department for Agricultural and Applied Economics, Virginia Polytechnic Institute and State University, USA

Abstract

The EU appliance energy consumption labelling scheme is a key component of efforts to increase the diffusion of energy-efficient household appliances. In this paper, the determinants of consumer knowledge of the energy label for house-hold appliances and the choice of class-A energy-efficient appliances are jointly estimated using data from a large survey of more than 20,235 German households. The results for five major appliances suggest that lack of knowledge of the energy label can generate considerable bias in both estimates of rates of uptake of class-A appliances and in estimates of the underlying determinants of choice of class-A appliance. Simulations of the choice to purchase a class-A appliance, given knowledge of the labelling framework, reveal that residence characteristics and, in several cases, regional electricity prices strongly increase the propensity to purchase a class-A appliance, but socio-economic characteristics have surprisingly little impact on appliance energy-class choice.