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Energy Economics
Article . 2022 . Peer-reviewed
License: CC BY
Data sources: Crossref
SSRN Electronic Journal
Article . 2020 . Peer-reviewed
Data sources: Crossref
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Energy Labels and Heuristic Decision-Making: The Role of Cognition and Energy Literacy

The Role of Cognition and Energy Literacy
Authors: Shutong He; Julia Blasch; Pieter van Beukering; Junfeng Wang;

Energy Labels and Heuristic Decision-Making: The Role of Cognition and Energy Literacy

Abstract

To overcome the inefficiency in household energy use, energy labels with a grade-like categorical efficiency rating-scale are widely used across the globe. However, presenting energy efficiency information in categories has been found to induce heuristic rather than rational decision-making, known as the "class valuation effect": consumers value the classes, while being inattentive to the actual energy use of the respective appliance. Although replacing the categorical by a continuous scale could eradicate this effect, it has not been formally examined to what extent a continuous scale promotes more rational decision-making. This study investigates whether visualising energy efficiency using a continuous-scale instead of a categorical-scale energy label increases consumers’ awareness of the energy performance of appliances. We experimentally examine this question in an online survey with randomised decision tasks conducted in China and the Netherlands, two countries using energy labels with categorical rating-scale whose populations differ in cognitive style and energy literacy (energy-related knowledge, attitudes, and behaviours). We find that continuous-scale labels are overall more effective in promoting rational decision-making. For Dutch respondents the effectiveness depends on their holistic cognitive tendency and the type of comparison they are faced with, whereas the Chinese sample is not sensitive to these moderators. Moreover, we find that the different aspects of energy literacy have opposing influence on rational choices: possessing knowledge related to daily-life energy use increases the likelihood of rational decisions, while energy-saving attitudes and behaviours encourage individuals to opt for more energy-efficient appliances even when it is not economically optimal. Based on the results, we suggest to represent energy efficiency on continuous scales as an auxiliary visual information to support purchase decisions. In energy education and information programmes, emphasis should be put on energy knowledge that directly links to daily life, which is well translated into consumers’ conscious decisions.

Country
Netherlands
Related Organizations
Keywords

Cognitive style, Energy efficiency, Household decision-making, Energy label, Information processing, Heuristics, Science for Sustainability, Energy literacy, SDG 12 - Responsible Consumption and Production, household decision-making, SDG 4 - Quality Education

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    influence
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    impulse
    This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
17
Top 10%
Average
Top 10%
hybrid