Label it and they will buy? The case of energy efficient class-A appliances

The EU appliance energy consumption labelling scheme is a key component of efforts to increase the diffusion of energy-efficient household appliances. In this paper, the determinants of consumer knowledge of the energy label for household appliances and the choice of class-A energy-efficient appliances are jointly estimated using data from a large survey of more than 20,235 German households. The results for five major appliances suggest that lack of knowledge of the energy label can generate considerable bias in both estimates of rates of uptake of class-A appliances and in estimates of the underlying determinants of choice of class-A appliance. Simulations of the choice to purchase a class-A appliance, given knowledge of the labelling framework, reveal that residence characteristics and, in several cases, regional electricity prices strongly increase the propensity to purchase a class-A appliance, but socio-economic characteristics have surprisingly little impact on appliance energy-class choice.