Report: Energy labels that make cents

Domestic PolicyBehavioural EconomicsBETA registered trials
Wednesday, 28 March 2018
Publication author(s):
Department of the Prime Minister and Cabinet
Publication abstract:

When shopping for appliances, people can find it difficult to weigh up the advertised cost of an appliance against its long-term running costs. This is sometimes referred to as the ‘energy‑efficiency gap’.

BETA joined forces with the Australian Government Department of the Environment and Energy and Appliances Online to see if we could encourage consumers to buy more energy‑efficient appliances—helping them to save money.

Drawing on behavioural insights, we designed an alternative energy label and ran a trial to test whether it – or the existing Australian Energy Rating Label – helped people to choose more energy‑efficient appliances online.

We found energy labels have positive effects on consumer behaviour compared to no labels. These effects are large enough to warrant consideration by policy makers interested in the twin policy goals of reducing carbon emissions and household energy costs. We did not find any difference between the impact of the existing label and the alternative label.

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