4.2 Article

How consumers respond to product certification and the value of energy information

Journal

RAND JOURNAL OF ECONOMICS
Volume 49, Issue 2, Pages 453-477

Publisher

WILEY
DOI: 10.1111/1756-2171.12231

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I study how consumers respond to competing pieces of information that differ in their degree of complexity and informativeness. In particular, I study the choice of refrigerators in the United States, where a mandatory disclosure labelling program provides detailed information about energy cost, and a certification labelling program provides a simple binary-star rating related to energy use. I find that the coarse certification may help some consumers to pay attention to energy information, but for others, it may crowd out efforts to process more accurate, but complex, energy information. The effect of the certification on overall energy use is thus ambiguous.

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