Consumer purchases of energy-efficient cars: How different labelling schemes could affect consumer response to price changes

Improved energy efficiency can help reduce pollution, contribute to energy security, and help consumers save money. This paper explores energy labelling schemes as a policy instrument for promoting energy-efficient cars in Spain. Specifically, it explores consumer responses to changes in vehicle pri...

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Detalles Bibliográficos
Autores: Galarraga, I., Kallbekken, S., Silvestri, A.
Tipo de recurso: artículo
Fecha de publicación:2020
País:España
Institución:Universidad del País Vasco
Repositorio:Addi. Archivo Digital para la Docencia y la Investigación
OAI Identifier:oai:addi.ehu.eus:10810/59755
Acceso en línea:http://hdl.handle.net/10810/59755
Access Level:acceso embargado
Palabra clave:Car segments
Energy efficiency
Labelling
Price elasticities of demand
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spelling Consumer purchases of energy-efficient cars: How different labelling schemes could affect consumer response to price changesGalarraga, I.Kallbekken, S.Silvestri, A.Car segmentsEnergy efficiencyLabellingPrice elasticities of demandImproved energy efficiency can help reduce pollution, contribute to energy security, and help consumers save money. This paper explores energy labelling schemes as a policy instrument for promoting energy-efficient cars in Spain. Specifically, it explores consumer responses to changes in vehicle prices. We derive the demand responses for two different efficiency labelling schemes: absolute and relative. To that end, we calculate own- and cross-price elasticities of demand for cars with efficiency labels on the Spanish car market. The results show that the elasticities for more efficient cars are in general higher. However, in the specific case of sedans, the elasticities depend on assumptions about how consumers decide which car to purchase. If consumers are concerned about the absolute energy performance of cars independently of other attributes, and thus pay attention to absolute labelling, demand for more efficient cars is more elastic than demand for less efficient cars. If consumers choose the car segment first and then the energy performance, using the relative label, the opposite result is found. The results suggest that both relative and absolute labelling schemes can be useful, depending on how consumers make their decisions. It might also be possible to design a mixed system. © 2019 Elsevier LtdAll authors wish to acknowledge the support of H2020: ENABLE- EU Grant agreement ID: 727524 . This research has also been supported by the Basque Government (Spain) through the BERC 2018–2021 programme and by the Spanish Ministry of Science, Innovation and Universities ( MICINN ) (Spain) through BC3's María de Maeztu excellence accreditation MDM-2017-0714 . Finally, financial support from the Government of Spain and the European Regional Development Fund through grant RTI2018-093692-B-I00 is gratefully acknowledged.Energy PolicyEuropean Commission202320232020info:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10810/59755reponame:Addi. Archivo Digital para la Docencia y la Investigacióninstname:Universidad del País VascoInglésinfo:eu-repo/grantAgreement/EC/H2020/727524EUS/BERC/BERC.2018-2021info:eu-repo/grantAgreement/MINECO/MDM-2017-0714/info:eu-repo/grantAgreement/MCIU/RTI2018-093692-B-I00/EUS/BERC/BERC.2018-2021ES/1PE/MDM-2017-0714https://dx.doi.org/10.1016/j.enpol.2019.111181info:eu-repo/semantics/embargoedAccesshttp://creativecommons.org/licenses/by-nc-sa/3.0/es/© Copyright 2020 Elsevier B.V., All rights reserved.Atribución-NoComercial-CompartirIgual 3.0 Españaoai:addi.ehu.eus:10810/597552026-06-18T09:23:17Z
dc.title.none.fl_str_mv Consumer purchases of energy-efficient cars: How different labelling schemes could affect consumer response to price changes
title Consumer purchases of energy-efficient cars: How different labelling schemes could affect consumer response to price changes
spellingShingle Consumer purchases of energy-efficient cars: How different labelling schemes could affect consumer response to price changes
Galarraga, I.
Car segments
Energy efficiency
Labelling
Price elasticities of demand
title_short Consumer purchases of energy-efficient cars: How different labelling schemes could affect consumer response to price changes
title_full Consumer purchases of energy-efficient cars: How different labelling schemes could affect consumer response to price changes
title_fullStr Consumer purchases of energy-efficient cars: How different labelling schemes could affect consumer response to price changes
title_full_unstemmed Consumer purchases of energy-efficient cars: How different labelling schemes could affect consumer response to price changes
title_sort Consumer purchases of energy-efficient cars: How different labelling schemes could affect consumer response to price changes
dc.creator.none.fl_str_mv Galarraga, I.
Kallbekken, S.
Silvestri, A.
author Galarraga, I.
author_facet Galarraga, I.
Kallbekken, S.
Silvestri, A.
author_role author
author2 Kallbekken, S.
Silvestri, A.
author2_role author
author
dc.contributor.none.fl_str_mv European Commission
dc.subject.none.fl_str_mv Car segments
Energy efficiency
Labelling
Price elasticities of demand
topic Car segments
Energy efficiency
Labelling
Price elasticities of demand
description Improved energy efficiency can help reduce pollution, contribute to energy security, and help consumers save money. This paper explores energy labelling schemes as a policy instrument for promoting energy-efficient cars in Spain. Specifically, it explores consumer responses to changes in vehicle prices. We derive the demand responses for two different efficiency labelling schemes: absolute and relative. To that end, we calculate own- and cross-price elasticities of demand for cars with efficiency labels on the Spanish car market. The results show that the elasticities for more efficient cars are in general higher. However, in the specific case of sedans, the elasticities depend on assumptions about how consumers decide which car to purchase. If consumers are concerned about the absolute energy performance of cars independently of other attributes, and thus pay attention to absolute labelling, demand for more efficient cars is more elastic than demand for less efficient cars. If consumers choose the car segment first and then the energy performance, using the relative label, the opposite result is found. The results suggest that both relative and absolute labelling schemes can be useful, depending on how consumers make their decisions. It might also be possible to design a mixed system. © 2019 Elsevier Ltd
publishDate 2020
dc.date.none.fl_str_mv 2020
2023
2023
dc.type.none.fl_str_mv info:eu-repo/semantics/article
format article
dc.identifier.none.fl_str_mv http://hdl.handle.net/10810/59755
url http://hdl.handle.net/10810/59755
dc.language.none.fl_str_mv Inglés
language_invalid_str_mv Inglés
dc.relation.none.fl_str_mv info:eu-repo/grantAgreement/EC/H2020/727524
EUS/BERC/BERC.2018-2021
info:eu-repo/grantAgreement/MINECO/MDM-2017-0714/
info:eu-repo/grantAgreement/MCIU/RTI2018-093692-B-I00/
EUS/BERC/BERC.2018-2021
ES/1PE/MDM-2017-0714
https://dx.doi.org/10.1016/j.enpol.2019.111181
dc.rights.none.fl_str_mv info:eu-repo/semantics/embargoedAccess
http://creativecommons.org/licenses/by-nc-sa/3.0/es/
© Copyright 2020 Elsevier B.V., All rights reserved.
Atribución-NoComercial-CompartirIgual 3.0 España
eu_rights_str_mv embargoedAccess
rights_invalid_str_mv http://creativecommons.org/licenses/by-nc-sa/3.0/es/
© Copyright 2020 Elsevier B.V., All rights reserved.
Atribución-NoComercial-CompartirIgual 3.0 España
dc.format.none.fl_str_mv application/pdf
dc.publisher.none.fl_str_mv Energy Policy
publisher.none.fl_str_mv Energy Policy
dc.source.none.fl_str_mv reponame:Addi. Archivo Digital para la Docencia y la Investigación
instname:Universidad del País Vasco
instname_str Universidad del País Vasco
reponame_str Addi. Archivo Digital para la Docencia y la Investigación
collection Addi. Archivo Digital para la Docencia y la Investigación
repository.name.fl_str_mv
repository.mail.fl_str_mv
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