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Cognitive reflection and the valuation of energy efficiency

Mark A. Andor, Manuel Frondel, Andreas Gerster and Stephan Sommer

Energy Economics, 2019, vol. 84, issue S1

Abstract: Based on a stated-choice experiment among about 3600 German household heads on the purchase of electricity-using durables, this paper explores the impact of cognitive reflection on consumers’ valuation of energy efficiency, as well as its interaction with consumers’ response to the EU energy label. Using a standard cognitive reflection test, our results indicate that consumers with low cognitive reflection value energy efficiency less than those with high scores. Furthermore, we find that consumers with a low level of cognitive reflection respond strongly to grade-like energy efficiency classes and tend to disregard detailed information on annual energy use, while the opposite holds true for consumers with a high level of cognitive reflection.

Keywords: Environmental certification; Decision heuristics; Energy-using durables (search for similar items in EconPapers)
JEL-codes: D03 D12 D83 Q48 Q50 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1016/j.eneco.2019.104527

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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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