Decision Making and Valuation for Environmental PolicyEPA Grant Number: R830988
Title: Decision Making and Valuation for Environmental Policy
Investigators: Teisl, Mario F. , Jones, Sue , Rubin, Jonathan
Current Investigators: Teisl, Mario F. , Rubin, Jonathan
Institution: University of Maine , Natural Resources Council of Maine
Current Institution: University of Maine
EPA Project Officer: Hahn, Intaek
Project Period: September 1, 2003 through August 31, 2006 (Extended to August 31, 2007)
Project Amount: $399,979
RFA: Market Mechanisms and Incentives for Environmental Management (2002) RFA Text | Recipients Lists
Research Category: Economics and Decision Sciences
To implement and study the effects of an eco-labeling and marketing program for vehicles sold in Maine (under the auspices of a voluntary agreement between the State's Department of Environmental Protection, the Maine Automobile Dealers Association and the Natural Resources Council of Maine).
To assess whether the program is successful in altering consumers' awareness, perceptions and behavior, the research will compare survey and sales data collected before and after the program. Unlike previous research that have studied the factors that influence individuals' attitudes toward, and willingness to pay for, environmental outcomes, we aim to measure how eco-information can be effective as a policy variable to change these factors. Further, we aim to translate any changes in market behavior due to the program into changes in fuel consumption and air quality.
Our research will provide valuable information regarding the type of environmental information sought by vehicle consumers and how best to provide the information. Further, the research will develop and test the effectiveness of different eco-messages to promote purchases of environmentally preferred vehicles. Analysis of consumer reactions across individual characteristics provides important market segmentation information; allowing policy makers and manufacturers the ability to better target specific populations. Most importantly, the analysis will identify whether eco-information programs are effective in altering consumer attitudes, preferences and purchase behavior. This is particularly important because eco-labeling and marketing are becoming increasingly important in a world where other remedies are becoming more difficult to obtain, or could potentially violate international trade rules.
From a policy perspective, one aim of eco-information policies is to educate consumers about the environmental impacts of product consumption, thereby leading to changes in purchasing behavior, and ultimately, achieving an environmentally preferred outcome. However, whether informed customer choice will lead to a cleaner vehicle purchases is an open question; one which is of particular concern to policy makers because light-duty vehicles represent the single largest source of greenhouse gas emissions in the U.S. Light-duty vehicles are also responsible for 18 percent of nitrogen oxide, 45 percent of carbon monoxide, and 26 percent of volatile organic compounds. The success of an eco-information program is contingent on consumers finding the information relevant, credible and easy to understand. Our research develops and tests the effectiveness of such a program.