The influence of eco-labelling on consumer behaviour - results of a discrete choice analysis for washing machines

Eco‐labelling is an important tool to overcome market failure due to information asymmetries for environmental products. While previous research has discussed the importance of labelling, this paper provides empirical data on the influence of eco‐labels on consumer behaviour for household appliances...

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Vydané v:	Business strategy and the environment Ročník 15; číslo 3; s. 185 - 199
Hlavní autori:	Sammer, Katharina, Wüstenhagen, Rolf
Médium:	Journal Article
Jazyk:	English
Vydavateľské údaje:	Chichester, UK John Wiley & Sons, Ltd 01.05.2006 Wiley Periodicals Inc
Predmet:	Asymmetric information Brand names Brands Business studies choice-based conjoint analysis Conjoint analysis Consumer behavior Consumer behaviour Consumer goods Consumers Descriptive labeling Discrete choice eco-labelling Energy efficiency Environment Environmental labelling Environmental protection EU energy label Europe European Union household appliances Household equipment information asymmetry Labeling Labelling Machinery Marketing Polls & surveys Studies Sustainability Washers & dryers Washing Washing machines United Kingdom > UK Switzerland
ISSN:	0964-4733, 1099-0836
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Abstract	Eco‐labelling is an important tool to overcome market failure due to information asymmetries for environmental products. While previous research has discussed the importance of labelling, this paper provides empirical data on the influence of eco‐labels on consumer behaviour for household appliances. It reports on the results of a survey involving a total of 151 choice‐based conjoint interviews conducted in Switzerland in Spring 2004. Choice‐based conjoint analysis (also known as discrete choice) has been applied to reveal the relative importance of various product attributes for consumers. The EU energy label is used for the product category chosen in our survey, washing machines, and we investigate the relative importance of this eco‐label compared with other product features (such as brand name) in consumers' purchasing decisions. We draw conclusions for sustainability marketing and policy. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment.
AbstractList	Eco-labelling is an important tool to overcome market failure due to information asymmetries for environmental products. While previous research has discussed the importance of labelling, this paper provides empirical data on the influence of eco-labels on consumer behaviour for household appliances. It reports on the results of a survey involving a total of 151 choice-based conjoint interviews conducted in Switzerland in Spring 2004. Choice-based conjoint analysis (also known as discrete choice) has been applied to reveal the relative importance of various product attributes for consumers. The EU energy label is used for the product category chosen in our survey, washing machines, and we investigate the relative importance of this eco-label compared with other product features (such as brand name) in consumers' purchasing decisions. We draw conclusions for sustainability marketing and policy. Eco-labelling is an important tool to overcome market failure due to information asymmetries for environmental products. While previous research has discussed the importance of labelling, this paper provides empirical data on the influence of eco-labels on consumer behaviour for household appliances. It reports on the results of a survey involving a total of 151 choice-based conjoint interviews conducted in Switzerland in Spring 2004. Choice-based conjoint analysis (also known as discrete choice) has been applied to reveal the relative importance of various product attributes for consumers. The EU energy label is used for the product category chosen in our survey, washing machines, and we investigate the relative importance of this eco-label compared with other product features (such as brand name) in consumers' purchasing decisions. We draw conclusions for sustainability marketing and policy. [PUBLICATION ABSTRACT] Eco‐labelling is an important tool to overcome market failure due to information asymmetries for environmental products. While previous research has discussed the importance of labelling, this paper provides empirical data on the influence of eco‐labels on consumer behaviour for household appliances. It reports on the results of a survey involving a total of 151 choice‐based conjoint interviews conducted in Switzerland in Spring 2004. Choice‐based conjoint analysis (also known as discrete choice) has been applied to reveal the relative importance of various product attributes for consumers. The EU energy label is used for the product category chosen in our survey, washing machines, and we investigate the relative importance of this eco‐label compared with other product features (such as brand name) in consumers' purchasing decisions. We draw conclusions for sustainability marketing and policy. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment. Eco-labelling is an important tool to overcome market failure due to information asymmetries for environmental products. While previous research has discussed the importance of labelling, this paper provides empirical data on the influence of eco-labels on consumer behaviour for household appliances. It reports on the results of a survey involving a total of 151 choice-based conjoint interviews conducted in Switzerland in Spring 2004. Choice-based conjoint analysis (also known as discrete choice) has been applied to reveal the relative importance of various product attributes for consumers. The EU energy label is used for the product category chosen in our survey, washing machines, and we investigate the relative importance of this eco-label compared with other product features (such as brand name) in consumers' purchasing decisions. We draw conclusions for sustainability marketing and policy. Copyright John Wiley & Sons. Reproduced with permission. An electronic version of this article is available online at http://www.interscience.wiley.com The influence of eco-labeling on consumer behavior is discussed. The objective is to provide empirical data on the influence of eco-labels on consumer behavior for household appliances. The results of a survey involving a total of 151 choice based conjoint interviews conducted in Switzerland in Spring 2004 are also provided. Choice-based conjoint analysis is applied to reveal the relative importance of various product attributes for consumers. The European Union (EU) energy label is used for the product category chosen in the study and the relative importance of this eco-label compared with other product features in consumers' purchasing decisions is investigated. The analysis shows that brands are important. In the washing machine sample, the willingness to pay for a premium brand compared with a no-name product is more than 1220 CHF, which is about a 50% premium and almost twice as much as the difference between A- and C- labels. The results are relevant to manufacturers of energy efficient products since it provides them with quantitative information for comparing investments in brand value.
Author	Sammer, Katharina Wüstenhagen, Rolf
Author_xml	– sequence: 1 givenname: Katharina surname: Sammer fullname: Sammer, Katharina organization: Institute for Economy and the Environment (IWOe-HSG), University of St. Gallen, Switzerland – sequence: 2 givenname: Rolf surname: Wüstenhagen fullname: Wüstenhagen, Rolf email: rolf.wuestenhagen@unisg.ch organization: Institute for Economy and the Environment (IWOe-HSG), University of St. Gallen, Switzerland
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References_xml	– reference: Theil H. 1970. On the estimation of relationships involving qualitative variables. American Journal Sociology 76: 103-154. – reference: Bundesamt für Statistik (Schweiz) (BFS). 2004. Einkommens- und Verbrauchserhebung 2002. Erste Ergebnisse. BFS: Neuchâtel. – reference: OECD. 1991. Environmental Labelling in OECD Countries. OECD: Paris. – reference: Waide P. 1998. Monitoring of Energy Efficiency Trends of European Domestic Refrigeration Appliances, final report. PW Consulting for ADEME on behalf of the European Commission (SAVE). PW Consulting: Manchester. – reference: SAFE. 2001. Energieeffizienz bei Elektrogeräten, Wirkung der Instrumente und Massnahmen. SAFE: Zürich. – reference: Harrington L, Damnics M. 2001. Energy Labelling and Standards Programs Throughout the World. The National Appliance and Equipment Energy Efficiency Committee: Victoria. – reference: Ben-Akiva M, Lerman SR. 1985. Discrete Choice Analysis, Theory and Application to Travel Demand. MIT Press: Cambridge, MA. – reference: Diller H. (ed.) 2001. Vahlens grosses Marketinglexikon. Vahlen: München. – reference: Verma R, Iqbal Z, Plaschka G. 2004. Understanding customer choices in e-financial services. California Management Review 46(4): 43-67. – reference: Goett A, Hudson K, Train K. 2000. Customers' choice among retail electricity suppliers: the willingness to pay for service attributes. Energy Journal 21(4): 1-28. – reference: Göbel E. 2002. Neue Institutionenökonomik, Konzeption und betriebswirtschaftliche Anwendungen. Lucius und Lucius: Stuttgart. – reference: FEA. 2002. Statistik Elektrohaushaltgeräte. Schweizerische Treuhandgesellschaft/eae: Zürich. – reference: Train KE. 2003. Discrete Choice Methods with Simulation. Cambridge University Press: Cambridge. – reference: Sawtooth. 1999. Choice-based Conjoint (CBC), technical paper. Sawtooth Software: Washington, DC. – reference: Gallastegui IG. 2002. The use of eco-labels: a review of the literature. European Environment 12: 316-331. – reference: Kroeber-Riel W, Weinberg P. 1999. Konsumentenverhalten, 7th edn. Vahlen: München. – reference: Rivers N, Jaccard M. 2005. Combining top-down and bottom-up approaches to energy-economy modeling using discrete choice methods. The Energy Journal 26(1): 83-106. – reference: Wiel S, McMahon JE. 2003. Governments should implement energy-efficiency standards and labels - cautiously. Energy Policy 31: 1403-1415. – reference: Hall J, Viney R, Haas M, Louviere J. 2004. Using stated preference discrete choice modeling to evaluate health care programs. Journal of Business Research 57: 1026-1032. – reference: Louviere JL, Hensher DA, Swait JD. 2003. Stated Choice Methods - Analysis and Applications, 2nd edn. Cambridge University Press: Cambridge. – reference: de Boer J. 2003. Sustainability labelling schemes: the logic of their claims and their functions for stakeholders. Business Strategy and the Environment 12: 254-264. – reference: Waide P. 2001. Monitoring of Energy Efficiency Trends of Refrigerators, Freezers, Washing Machines and Washer-Driers Sold in the EU, final report. PW Consulting for ADEME on behalf of the European Commission (SAVE). PW Consulting: Manchester. – reference: Kreps DM. 1990. A Course in Microeconomic Theory. Harvester Wheatsheaf: New York. – reference: Alec Alliance Energie-Konsum. 2002. Marktcheck 2002. Umsetzung der Energieetikette für Haushaltsgeräte und Lampen im Schweizer Handel. Schweizerische Agentur für Energieeffizienz: Zürich. – reference: Nelson P. 1970. Information and consumer behavior. Journal of Political Economy 78: 311-329. – reference: Hawkins DJ, Best RJ, Coney KA. 2001. Consumer Behaviour - Building Marketing Strategy, 8th edn. McGraw-Hill: New York. – reference: OECD. 1997. Sustainable Consumption and Production. OECD. paris. – reference: Banerjee A, Solomon BD. 2003. Eco-labeling for energy efficiency and sustainability: a meta-evaluation of US programs. Energy Policy 31: 109-123. – reference: Truffer B, Markard J, Wüstenhagen R. 2001. Eco-labeling of electricity - strategies and tradeoffs in the definition of environmental standards. Energy Policy 29(11): 885-897. – reference: Karl H, Orwat C. 1999. Environmental labelling in Europe: European and national tasks. European Environment 9: 212-220. – reference: Darby M, Karni E. 1973. Free Competition and the Optimal amount of Fraud. Journal of Law and Economics 16: 67-88. – reference: Quandt RE. 1968. Estimation of modal splits. Transportation Research 2: 41-50. – reference: Anderson RC, Hansen EN. 2004. The impact of environmental certification on preferences for wood furniture: a conjoint analysis approach. Forest Products Journal 54(3): 42-51. – reference: Alec Alliance Energie-Konsum. 2003. Marktcheck 2003. Energieetikette bei Haushaltsgeräten und Lampen, Die Ergebnisse der 2. Untersuchung. Schweizerische Agentur für Energieeffizienz: Zürich. – reference: Lancaster K. 1966. A new approach to consumer theory. Journal of Political Economy 74: 132-157. – reference: Winward J, Schiellerup P, Boardman B. 1998. Cool Labels - the First Three Years of the European Energy Label. Environmental Change Unit, University of Oxford: Oxford. – reference: Roe B, Boyle KJ, Teisl MF. 1996. Using conjoint analysis to derive estimates of compensating variation. Journal of Environmental Economics and Management 31: 145-159. – reference: Wüstenhagen R. 2000. Ökostrom - von der Nische zum Massenmarkt [Green Electricity - from Niche to Mass Market]. vdf: Zürich. – reference: Hahn C. 1997. Conjoint- und Discrete Choice Analyse als Verfahren zur Abbildung von Präferenzstrukturen und Produktauswahlentscheidungen: Ein theoretischer und computergestützter empirischer Vergleich. Betriebswirtschaftliche Schriftenreihe 80. Lit: Münster. – year: 1985 – year: 2001 – year: 2003 – volume: 54 start-page: 42 issue: 3 year: 2004 end-page: 51 article-title: The impact of environmental certification on preferences for wood furniture: a conjoint analysis approach publication-title: Forest Products Journal – year: 1996 – volume: 21 start-page: 1 issue: 4 year: 2000 end-page: 28 article-title: Customers' choice among retail electricity suppliers: the willingness to pay for service attributes publication-title: Energy Journal – year: 2000 – volume: 26 start-page: 83 issue: 1 year: 2005 end-page: 106 article-title: Combining top‐down and bottom‐up approaches to energy‐economy modeling using discrete choice methods publication-title: The Energy Journal – volume: 12 start-page: 254 year: 2003 end-page: 264 article-title: Sustainability labelling schemes: the logic of their claims and their functions for stakeholders publication-title: Business Strategy and the Environment – year: 1990 – volume: 16 start-page: 67 year: 1973 end-page: 88 article-title: Free Competition and the Optimal amount of Fraud publication-title: Journal of Law and Economics – volume: 57 start-page: 1026 year: 2004 end-page: 1032 article-title: Using stated preference discrete choice modeling to evaluate health care programs publication-title: Journal of Business Research – year: 1998 – volume: 9 start-page: 212 year: 1999 end-page: 220 article-title: Environmental labelling in Europe: European and national tasks publication-title: European Environment – volume: 46 start-page: 43 issue: 4 year: 2004 end-page: 67 article-title: Understanding customer choices in e‐financial services publication-title: California Management Review – volume: 29 start-page: 885 issue: 11 year: 2001 end-page: 897 article-title: Eco‐labeling of electricity – strategies and tradeoffs in the definition of environmental standards publication-title: Energy Policy – volume: 31 start-page: 1403 year: 2003 end-page: 1415 article-title: Governments should implement energy‐efficiency standards and labels – cautiously publication-title: Energy Policy – volume: 78 start-page: 311 year: 1970 end-page: 329 article-title: Information and consumer behavior publication-title: Journal of Political Economy – volume: 76 start-page: 103 year: 1970 end-page: 154 article-title: On the estimation of relationships involving qualitative variables publication-title: American Journal Sociology – year: 2002 – volume: 31 start-page: 145 year: 1996 end-page: 159 article-title: Using conjoint analysis to derive estimates of compensating variation publication-title: Journal of Environmental Economics and Management – year: 2004 – year: 1997 – volume: 2 start-page: 41 year: 1968 end-page: 50 article-title: Estimation of modal splits publication-title: Transportation Research – year: 1974 – volume: 74 start-page: 132 year: 1966 end-page: 157 article-title: A new approach to consumer theory publication-title: Journal of Political Economy – start-page: 105 year: 1974 end-page: 142 – year: 1991 – volume: 31 start-page: 109 year: 2003 end-page: 123 article-title: Eco‐labeling for energy efficiency and sustainability: a meta‐evaluation of US programs publication-title: Energy Policy – volume: 12 start-page: 316 year: 2002 end-page: 331 article-title: The use of eco‐labels: a review of the literature publication-title: European Environment – year: 1999 – volume-title: Marktcheck 2002. Umsetzung der Energieetikette für Haushaltsgeräte und Lampen im Schweizer Handel year: 2002 ident: e_1_2_1_2_1 – volume-title: Choice‐based Conjoint (CBC) year: 1999 ident: e_1_2_1_37_1 – ident: e_1_2_1_40_1 doi: 10.1017/CBO9780511753930 – ident: e_1_2_1_16_1 doi: 10.1002/eet.304 – volume-title: Konsumentenverhalten year: 1999 ident: e_1_2_1_26_1 – ident: e_1_2_1_35_1 doi: 10.1006/jeem.1996.0037 – ident: e_1_2_1_27_1 doi: 10.1086/259131 – ident: e_1_2_1_30_1 doi: 10.1086/259630 – volume-title: Environmental Labelling in OECD Countries year: 1991 ident: e_1_2_1_31_1 – volume-title: Stated Choice Methods – Analysis and Applications year: 2003 ident: e_1_2_1_28_1 – ident: e_1_2_1_34_1 doi: 10.5547/ISSN0195-6574-EJ-Vol26-No1-4 – ident: e_1_2_1_10_1 doi: 10.1086/466756 – ident: e_1_2_1_23_1 – volume-title: Monitoring of Energy Efficiency Trends of Refrigerators, Freezers, Washing Machines and Washer‐Driers Sold in the EU year: 2001 ident: e_1_2_1_44_1 – volume-title: Sustainable Consumption and Production year: 1997 ident: e_1_2_1_32_1 – ident: e_1_2_1_42_1 doi: 10.2307/41166274 – volume-title: Vahlens grosses Marketinglexikon year: 2001 ident: e_1_2_1_12_1 – ident: e_1_2_1_11_1 doi: 10.1002/bse.362 – ident: e_1_2_1_14_1 – volume-title: Ökostrom – von der Nische zum Massenmarkt [Green Electricity – from Niche to Mass Market] year: 2000 ident: e_1_2_1_47_1 – volume-title: Conjoint‐ und Discrete Choice Analyse als Verfahren zur Abbildung von Präferenzstrukturen und Produktauswahlentscheidungen: Ein theoretischer und computergestützter empirischer Vergleich. Betriebswirtschaftliche Schriftenreihe 80 year: 1997 ident: e_1_2_1_19_1 – ident: e_1_2_1_33_1 doi: 10.1016/0041-1647(68)90007-5 – volume: 54 start-page: 42 issue: 3 year: 2004 ident: e_1_2_1_4_1 article-title: The impact of environmental certification on preferences for wood furniture: a conjoint analysis approach publication-title: Forest Products Journal – ident: e_1_2_1_45_1 doi: 10.1016/S0301-4215(02)00199-4 – volume-title: Discrete Choice Analysis, Theory and Application to Travel Demand year: 1985 ident: e_1_2_1_7_1 – ident: e_1_2_1_6_1 – ident: e_1_2_1_5_1 doi: 10.1016/S0301-4215(02)00012-5 – ident: e_1_2_1_20_1 doi: 10.1016/S0148-2963(02)00352-1 – volume-title: Statistik Elektrohaushaltgeräte year: 2002 ident: e_1_2_1_15_1 – volume-title: Energy Labelling and Standards Programs Throughout the World year: 2001 ident: e_1_2_1_21_1 – ident: e_1_2_1_8_1 – start-page: 105 volume-title: Frontiers in Econometrics year: 1974 ident: e_1_2_1_29_1 – volume-title: Einkommens‐ und Verbrauchserhebung 2002. Erste Ergebnisse year: 2004 ident: e_1_2_1_9_1 – volume-title: Neue Institutionenökonomik, Konzeption und betriebswirtschaftliche Anwendungen year: 2002 ident: e_1_2_1_17_1 – volume-title: Cool Labels – the First Three Years of the European Energy Label year: 1998 ident: e_1_2_1_46_1 – ident: e_1_2_1_25_1 doi: 10.1515/9780691215747 – volume-title: Monitoring of Energy Efficiency Trends of European Domestic Refrigeration Appliances year: 1998 ident: e_1_2_1_43_1 – ident: e_1_2_1_13_1 – ident: e_1_2_1_24_1 doi: 10.1002/(SICI)1099-0976(199909/10)9:5<212::AID-EET203>3.0.CO;2-I – ident: e_1_2_1_39_1 – volume-title: Energieeffizienz bei Elektrogeräten, Wirkung der Instrumente und Massnahmen year: 2001 ident: e_1_2_1_36_1 – volume-title: Marktcheck 2003. Energieetikette bei Haushaltsgeräten und Lampen, Die Ergebnisse der 2. 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Snippet	Eco‐labelling is an important tool to overcome market failure due to information asymmetries for environmental products. While previous research has discussed... Eco-labelling is an important tool to overcome market failure due to information asymmetries for environmental products. While previous research has discussed... The influence of eco-labeling on consumer behavior is discussed. The objective is to provide empirical data on the influence of eco-labels on consumer behavior...
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SubjectTerms	Asymmetric information Brand names Brands Business studies choice-based conjoint analysis Conjoint analysis Consumer behavior Consumer behaviour Consumer goods Consumers Descriptive labeling Discrete choice eco-labelling Energy efficiency Environment Environmental labelling Environmental protection EU energy label Europe European Union household appliances Household equipment information asymmetry Labeling Labelling Machinery Marketing Polls & surveys Studies Sustainability Washers & dryers Washing Washing machines
Title	The influence of eco-labelling on consumer behaviour - results of a discrete choice analysis for washing machines
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