Nudging energy efficiency behavior: The effect of message framing on implicit discount rate

Jiyong Park, WooJin Son, HyungBin Moon and JongRoul Woo

Energy Economics, 2023, vol. 117, issue C

Abstract: We experimentally and empirically analyzed how gain-framing and loss-framing information regarding the economic benefits of purchasing a high-efficiency appliance affects consumers' implicit discount rate (IDR). For the empirical analysis, we focused on the South Korean air purifier market, and we used the contingent valuation method to estimate the IDR. The results suggest differences in consumer groups that respond more sensitively to message framing. In the loss frame, the respondents' cognition level showed an influence on the IDR. The median IDR was 10.15% and 6.59% in the gain and loss frames, respectively. These figures were higher than the general market discount rate, regardless of how the given information was framed, thus confirming an energy efficiency gap. We deduced that there are more consumers with a very low IDR in the loss frame than in the gain frame. Hence, it will be possible to reduce the energy efficiency investment gap and encourage consumers to voluntarily invest in energy efficiency through message framing nudging via consumption efficiency appliance labels.

Keywords: Energy efficiency behavior; Message framing effect; Implicit discount rate; Nudge theory; Contingent valuation method (search for similar items in EconPapers)
JEL-codes: D12 D91 O33 Q41 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:117:y:2023:i:c:s0140988322006144

DOI: 10.1016/j.eneco.2022.106485

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