Effects of rescaling the EU energy label on household preferences for top-rated appliances

The European Union has decided to replace its previously existing A+++ to D labelling scheme for cold appliances with a rescaled A to G labelling scheme in 2021. Employing a demographically representative discrete choice experiment on refrigerator adoption using an online survey among more than 1000 households in Germany, this paper explores the effects of the rescaled scheme compared to the previous scheme on the stated uptake of top-rated refrigerators, i.e. those classified A+++ under the previous scheme and B under the rescaled scheme. Since in practice both schemes may be shown for a transitory period, the paper also explores the effects of displaying both labels simultaneously. The findings from estimating a mixed logit model suggest that showing the rescaled label alone significantly increases valuation of top-rated refrigerators compared to showing the previous A+++ to D label alone. In comparison, when the previous A+++ to D and the rescaled A to G schemes are shown simultaneously, no benefits of introducing the rescaled label are found. Thus, policymakers should strive to enforce the application of the rescaled labelling scheme as quickly as possible and to shorten transitory periods where both labels are shown simultaneously.