Influence of Eco-Labeling on Private Household’s Automobile Adoption

  The German Eco-Label for automobiles (Source: BMWi)

Energy labels serve to better inform energy consumers about environmentally relevant product characteristics, and thus to make them more ‘visible’ to them. The question arises, however, how relevant such a label actually is for the purchase decision of a consumer about a certain product. In this research, the influence of energy labels for private vehicles on the purchase decision is investigated. The research is motivated by current developments in European environmental policy to mitigate transport sector CO₂ emissions by means of emission standards, and in particular the introduction of an energy label for automobiles in Germany (Pkw-EnVKV) to foster the achievement of these standards in automobile transport.

Apart from the EU energy label for automobiles, car manufacturers have a number of possibilities to stress certain energy and environmental characteristics of their products in their marketing efforts. To this end, firms have increasingly made use of a special form of labels in recent years, so called “Öko-Signets“. Öko-Signets are used in the automobile industry to advertize fuel-efficient, environmentally friendly cars and such equipped with special technologies. In empirical research, despite the growing number of Öko-Signets, so far little research has dealt with their relevance for the consumers. This research also investigats the relative importance of this special kind of label for potential car adopters.

In order to analyze consumers‘ preferences with regard to these environment- and energy-related characteristics (EU energy label, Öko-Signet) of a product, it is important to consider these in relation to other attributes (e.g. brand name, price). In doing so, differences between the various consumer groups or market segments need to be studied as well. The approach adopted in this research is similar to that in Sammer/Wüstenhagen (Bus. Strat. Env. 15, 185–199, 2006; Zeitschrift für angewandte Umweltforschung 18(1): 61-78, 2007), in which the preferences of the Swiss population with regard to certain washing machines and automobiles, respectively, are empirically studied in detail. Sammer/Wüstenhagen study the influence of the (obligatory) Swiss energy label for different durable goods used in the private households on consumers, and show that these labels contribute significantly to raising the consumers‘ willingness to pay.

The approach adopted in our research is to consider a simulated automobile purchase decision, and to use a so-called ratings-based approach, where preferences of consumers are measured in an internet-based survey, and subsequently statistically evaluated. The respondents in the survey indicate on a predefined scale how likely they are to buy a specific combination of attributes. Our contribution with respect to Sammer/Wüstenhagen is the relevant policy context and the inclusion of different types of labels in the analysis.

Supervised student research

Martin M. (2011). Der Einfluss von Öko-Labels auf das Entscheidungsverhalten privater Haushalte bei Personenkraftwagen, Bachelor thesis, Chair of Energy Economics and Management, Faculty of Business and Economics, RWTH Aachen University, September.