Enhancing the informational nudge of energy labels: Evidence from a DCE in New Delhi

Charu Grover (), Sangeeta Bansal and Adan Martinez-Cruz
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Charu Grover: Shaheed Bhagat Singh College, University of Delhi, India

No 2021:4, CERE Working Papers from CERE - the Center for Environmental and Resource Economics

Abstract: India's contribution to global CO2 emissions makes it a priority case for policy makers worldwide. The Indian government is considering the adoption of energy labels for new passenger cars to tackle CO2 emissions. This paper's first aim is to asses New Delhi's car buyers' preferences for cars displaying energy labels. To do so, a discrete choice experiment (DCE) has been designed to document both WTP for energy efficiency (212 USD for one kilometer per liter) and WTP for the best efficiency label (4.93 thousand USD). The informational nudge embedded in a labeling system may not be enough to boost uptake of efficient cars. Thus this paper investigates the potential of combining a labeling system and car driving restrictions. Via a split-sample approach, this paper documents an increase of 2.55 thousand USD in stated WTP for the best efficiency label. This number can be interpreted as reflecting the costs imposed by the driving restrictions on car drivers. Under this interpretation, 2.55 thousand USD fall within the range of estimations reported in previous studies. The results in this paper suggest that a combination of driving restrictions and a labeling system may deliver an increase in energy efficient cars in New Delhi.

Keywords: Energy labeling system; driving restrictions; willingness to pay; discrete choice experiment; split-sample approach; New Delhi. (search for similar items in EconPapers)
JEL-codes: Q48 Q50 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2021-03-01
New Economics Papers: this item is included in nep-dcm, nep-ene, nep-env, nep-isf and nep-tre
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:slucer:2021_004

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