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Energy labels and heuristic decision-making: The role of cognition and energy literacy

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  • He, Shutong
  • Blasch, Julia
  • van Beukering, Pieter
  • Wang, Junfeng

Abstract

Energy labels are used worldwide to overcome the inefficiency in household energy use. Presenting energy efficiency in grade-like categories has been found to induce heuristic decision-making, known as the “class valuation effect”. This study investigates whether visualising energy efficiency using a continuous-scale label increases consumers’ consciousness when purchasing appliances. We examine this question in an online survey with randomised decision tasks conducted in China and the Netherlands. In the Dutch sample, the effectiveness of continuous-scale labels depends on individuals’ holistic cognitive tendency and the type of comparison they are faced with, whereas the Chinese sample is not sensitive to these moderators. Moreover, energy literacy shows mixed influence on individual decisions. Results suggest that representing energy efficiency on continuous scales can be used as supportive visual information to facilitate purchase decisions. Regarding energy education, knowledge that directly links to daily energy use seems to translate well into consumers’ conscious decisions.

Suggested Citation

  • He, Shutong & Blasch, Julia & van Beukering, Pieter & Wang, Junfeng, 2022. "Energy labels and heuristic decision-making: The role of cognition and energy literacy," Energy Economics, Elsevier, vol. 114(C).
    • Handle: RePEc:eee:eneeco:v:114:y:2022:i:c:s0140988322004133
    DOI: 10.1016/j.eneco.2022.106279
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    2. Schleich, Joachim & Dütschke, Elisabeth & Kanberger, Elke & Ziegler, Andreas, 2024. "On the relationship between individual carbon literacy and carbon footprint components," Ecological Economics, Elsevier, vol. 218(C).
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    5. Mitsutsugu Hamamoto, 2023. "Estimating consumers’ discount rates in energy-saving investment decisions: a comparison of revealed and stated approaches," SN Business & Economics, Springer, vol. 3(7), pages 1-19, July.

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    More about this item

    Keywords

    Energy label; Household decision-making; Heuristics; Cognitive style; Energy literacy;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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