Grantee Research Project Results

2006 Progress Report: Consumer Labeling and Motivation Crowding-Out

EPA Grant Number: R832849
Title: Consumer Labeling and Motivation Crowding-Out
Investigators: Clark, Christopher D. , Hanemann, Michael , Jensen, Kimberly L. , Russell, Clifford , Yen, Steven
Institution: University of Tennessee , Vanderbilt University , University of California - Berkeley
Current Institution: University of Tennessee , University of California - Berkeley , Vanderbilt University
EPA Project Officer: Hahn, Intaek
Project Period: April 10, 2006 through April 9, 2009
Project Period Covered by this Report: April 10, 2006 through April 9, 2007
Project Amount: $309,171
RFA: Environmental Behavior and Decisionmaking: Determining the Effectiveness of Environmental Information Disclosure and Provision (2005) RFA Text |  Recipients Lists
Research Category: Environmental Justice

Objective:

The primary objective of this project is to explore consumer reactions to environmental product labels on market goods. This exploration will focus on two particular aspects of these reactions. First, consumer willingness-to-pay for the reduction of greenhouse gas emissions associated with the production of energy through the choice of either energy-saving products or production processes will be estimated. Given the indirect nature by which these measures are derived, their real value will be in comparing the relative effect of reductions through either energy savings or changes in production practices. Second, the effect of a product label based on an environmental attribute with both public and private benefits (e.g., emissions reductions and cost savings associated with a more energy-efficient appliance) has on consumers will be contrasted with that of a label based on an attribute with purely public benefits (e.g., reduced emissions associated with a more energy-efficient production process or the use of renewable energy in such production). A well-developed body of research suggests that the inclusion of relatively small extrinsic rewards (such as cost savings from an energy-efficient appliance) can actually decrease the effect of existing intrinsic rewards (such as the internal motivation for consuming an environmentally friendly product). This effect, commonly referred to as motivation crowding out, has important implications for the selection, design and marketing of environmental attributes or labels.

Progress Summary:

To date, work has been focused in five areas:

• Searching the literature to glean the latest information on the EnergyStar and related environmental labeling programs and on the nonmarket valuation methodology to be employed in the project;
• Choosing an appropriate product and set of defining characteristics for the project, specifically including two different environmental labeling schemes;
• Acquiring and developing expertise in the software to be used in creating and implementing the online conjoint analysis survey;
• Designing the survey instrument; and
• Designing the process for evaluating the choice of product and characteristics and the survey instrument through focus group analysis.

Future Activities:

All of the ongoing work will continue. Major milestones to come include:

• Testing choice of product and product characteristics (including environmental labeling schemes) with a focus group;
• Creating a draft survey instrument;
• Testing the draft survey instrument with a focus group;
• Securing bids from companies interested in hosting and/or providing access to individuals willing to participate in the online survey; and
• Implementing the survey instrument.

Supplemental Keywords:

air, global climate, decision-making, environmental behavior, information disclosure, information dissemination, public reporting, policy design, impact of federal policy instruments, willingness-to-pay, preferences, public good, psychological, eco-labeling, EnergyStar, social science, economic theory, behavioral economics;, economic theory, econometric analysis, contingent choice, conjoint analysis, nonmarket valuation, survey, pollution prevention, life-cycle analysis, clean technologies, innovative technology, renewable, environmentally conscious manufacturing, manufacturing, electric, gas, and sanitary services, household appliances (SIC 363x), combination electric and gas, and other utility (SIC 493x), public policy, consumer labeling, pollution prevention, surveys, social science, preferences, ENVIRONMENTAL PROTECTION AGENCY, Economic, Social, & Behavioral Science Research Program, Scientific Discipline, RFA, Social Science, decision-making, Economics & Decision Making, Reinvention, Ecology and Ecosystems, Environmental Monitoring, Economics, consumer perception, preference formation, psychological attitudes, decision analysis, economic objectives, incentives, ozone, environmental awareness, eco-labeling, social impact analysis, willingness to pay, conjoint analysis, stated preference, behavior reactions, social psychology, valuation, surveys, energy consumption,, RFA, Scientific Discipline, ENVIRONMENTAL PROTECTION AGENCY, Economic, Social, & Behavioral Science Research Program, Economics & Decision Making, Economics, decision-making, Social Science, Reinvention, Ecology and Ecosystems, Environmental Monitoring, economic objectives, conjoint analysis, willingness to pay, social impact analysis, incentives, environmental awareness, surveys, psychological attitudes, social psychology, valuation, decision analysis, ozone, behavior reactions, eco-labeling, energy consumption, stated preference, contingent valuation, consumer perception

Progress and Final Reports:

Original Abstract

2007

Final