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Does energy efficiency label alter consumersf purchase decision? A latent class approach on Shanghai data

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Author Info
Junyi Shen (OSIPP,Osaka University)
Tatsuyoshi Saijo (ISER,Osaka University)

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Abstract

In this paper we apply hypothetical choice experiments through a field survey in Shanghai of China to examine whether China Energy Efficiency Label affects consumersf choices of air conditioner and refrigerator. A latent class approach is used to observe both heterogeneities among the respondents and product brands. The results suggest that the effect of energy efficiency label on consumersf preferences is twofold. First, more energy efficient air conditioners or refrigerators are preferred by consumers, no matter whether they are with foreign brands or domestic brands and whether they are new or second-hand. Second, energy efficiency label per se is recognized by consumers. In addition, presence of a (hypothetical) label that indicates the electricity billfs difference comparing to a standard model is significantly preferred by the respondents in most of the cases, suggesting that more information provided to consumers makes them much happier. Finally, the class probability weighted willingness to pay values for one rank upgrading in energy efficiency of refrigerator are higher than those of air conditioner, implying that consumers have an incentive to pay more for appliances used more frequently.

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File URL: http://www.osipp.osaka-u.ac.jp/archives/DP/2007/DP2007E005.pdf
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Publisher Info
Paper provided by Osaka School of International Public Policy, Osaka University in its series OSIPP Discussion Paper with number 07E005.

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Length: 32 pages
Date of creation: May 2007
Date of revision:
Handle: RePEc:osp:wpaper:07e005

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Related research
Keywords: Energy efficiency label; Consumersf purchase decision; Latent class model; Willingness to pay; China;

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Find related papers by JEL classification:
C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models
C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
Q49 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Other

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Fisher-Vanden, Karen & Jefferson, Gary H. & Liu, Hongmei & Tao, Quan, 2004. "What is driving China's decline in energy intensity?," Resource and Energy Economics, Elsevier, vol. 26(1), pages 77-97, March. [Downloadable!] (restricted)
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    Other versions:
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Junyi Shen, 2008. "Understanding the determinants of consumersf willingness to pay for eco-labeled products: An empirical analysis of the China Environmental Label," OSIPP Discussion Paper 08E001, Osaka School of International Public Policy, Osaka University. [Downloadable!]
  2. Simona Rasciute & Eric J Pentecost, 2008. "The Latent Heterogeneity in Investment Location Choices of Multinational Enterprises," Discussion Paper Series 2008_16, Department of Economics, Loughborough University, revised Dec 2008. [Downloadable!]
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