WP-045: Giovanna d'Adda, Yu Gao, and Massimo Tavoni "Making Energy Costs Salient Can Lead to Low-efficiency Purchases" (February 2020)

We conduct a large-scale field experiment to evaluate the impact of energy cost information on purchasing decisions of large household appliances. We vary the presence of energy cost information and its level of temporal aggregation. We find that increasing the salience of energy costs leads to the purchasing of less efficient products - especially when providing lifetime energy costs. Search and navigation data on the retailer’s website confirm that the treatments increase attention paid to less efficient products. This is consistent with customers over-estimating energy savings from more efficient products. Results have implications for designing information campaigns aimed at promoting energy efficiency.