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Is there a price premium for energy efficiency labels? Evidence from the Introduction of a Label in Korea

Ju Young Park

Energy Economics, 2017, vol. 62, issue C, 240-247

Abstract: This study examines the price premium from Korea's Energy Efficiency Grade Label. The Korean government recently began energy certification of televisions, providing a setting to analyze a possible price effect of the new label. Hedonic regression results seem to show that a price premium exists for products with the Energy Efficiency Grade Label. However, potential unobserved heterogeneity is a concern. Difference-in-difference and fixed-effects models are used to capture the net effect of the label by controlling for time and product differences. The results suggest that any price premium does not result from the energy efficiency label itself. Instead, energy-efficient products already had higher prices before the introduction of the energy efficiency label. The finding turns our attention to the importance of careful design of labeling programs.

Keywords: Price premium; Energy efficiency; Eco-label (search for similar items in EconPapers)
JEL-codes: Q00 Q40 Q51 Q58 Q49 Q50 (search for similar items in EconPapers)
Date: 2017
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Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant

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