The Cost of Environmental Messaging On Demand For Energy

The Cost of Environmental Messaging
On Demand For Energy Efficiency
DENA M. GROMET
HOWARD KUNREUTHER
The Wharton School, University of Pennsylvania
RICHARD P. LARRICK
Fuqua School of Business, Duke University
“Harmony Between Man, Nature And Machine”
“Save Energy And
Fight Climate Change”
2
VALUES AND CHOICE
•  Identity-related concerns affect consumer choice
(Akerlof & Kranton, 2010; Berger & Heath, 2007, 2008; LeBoeuf et al., 2010; White & Dahl,
2006, 2007)
•  Choice as a reflection of what one values
•  Effectiveness of
promoting the
environment
•  Likely moderated by
political ideology
3
HYPOTHESES AND OVERVIEW
•  Environmental aspect polarizes energy efficiency
•  Promoting the environment:
•  Repels conservatives
•  Reject energy-efficient choices would have selected
otherwise
•  Study 1: Ideology and Energy Efficiency
•  Studies 2 and 3: Labels and Choice
•  Real choice of incandescent vs. fluorescent light bulb
(Study 2)
•  Hypothetical choice of standard vs. hybrid car (Study 3)
4
STUDY 1
•  Political ideology à Energy Efficiency
•  Key determinant: Value placed on emission
reduction (Environmental Concern)
•  Additional aspects of energy efficiency:
•  Foreign oil dependence reduction (Energy Independence)
•  Energy cost reduction (Cost)
•  N = 657 U.S. participants recruited from Clearvoice
Gromet, Kunreuther, & Larrick, 2013, PNAS
5
DESIGN (CORRELATIONAL)
•  Political Ideology (a = .87)
•  Identify as politically liberal/conservative
•  Identify with Democrats; Republicans
•  Read description of energy efficiency
•  Potential mediators: Valuation
•  Reducing carbon emissions (Environment; a = .93)
•  Reducing foreign oil dependence (Energy Independence; a
= .83)
•  Reducing cost of energy use (Cost; a = .79)
•  Main DV: Favor investment in energy efficiency
•  Self, Americans, U.S. government, U.S. businesses (a = .83)
Gromet, Kunreuther, & Larrick, 2013, PNAS
6
SUPPORT FOR ENERGY EFFICIENCY
Favor Investment in Energy
Efficiency
Political Conservatism
-.24***
(.03)
Age
.004
(.003)
Gender (0 = Male; 1 = Female)
.13
(.09)
Education Level
-.02
(.03)
Income Level
.06
(.05)
Constant
5.49***
(0.22)
Gromet, Kunreuther, & Larrick, 2013, PNAS
7
PERCEIVED VALUE
7
Carbon vs. Oil: B = -.08, SE = .02, 95% CI = -.12 to -.04
Carbon vs. Cost: B = -.08, SE = .02, 95% CI = -.13 to -.03
6
Perceived Value
(1-7)
Carbon
Emissions
Foreign Oil
5
Cost
4
More Liberal (-1 SD)
Gromet, Kunreuther, & Larrick, 2013, PNAS
More Conservative (+1 SD)
8
DO ENVIRONMENTAL LABELS AFFECT
CHOICE?
•  Environmental Label: Repels conservatives from
energy efficient choice
•  Makes choice about concern for the environment
9
STUDY 2: LIGHT BULBS
•  Participants (N = 210) given $2 to purchase
incandescent (standard) or fluorescent (efficient)
•  Learned that fluorescent would:
•  Last for 9000 more hours
•  Result in a 75% reduction in electricity costs
Price: $0.50
Price: $0.50
Price: $1.50
Price: $0.50
PROTECT THE
ENVIRONMENT
Gromet, Kunreuther, & Larrick, 2013, PNAS
10
BULB CHOICE
1
0.9
0.8
0.7
Predicted
Probability
of Choosing
Fluorescent
Bulb
0.6
0.5
0.4
No Label
0.3
Green Label
0.2
0.1
0
-1.5
Liberal
-1
-0.5
0
0.5
Political Ideology Composite
Gromet, Kunreuther, & Larrick, 2013, PNAS
1
1.5
Conservative
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ONE ALTERNATIVE EXPLANATION
7
6
5
Incandescent
4
Fluorescent
3
2
1
Function
Savings
Gromet, Kunreuther, & Larrick, 2013, PNAS
Environmental Benefit
12
OTHER MESSAGES THAT AFFECT
CHOICE?
13
STUDY 3: HYBRID CAR
•  Participants (N = 609 adults recruited online)
•  Choice: Standard vs. Hybrid Car
•  Hybrid: Better MPG; Higher price
•  Label: Save The Earth (Environment) vs. No Foreign
Oil (Energy Independence)
14
PERCEIVED VALUE
6.5
6
5.5
Perceived Value
(1-7)
Carbon Emissions
5
Foreign Oil
4.5
4
More Liberal (-1 SD)
More Conservative
(+1 SD)
15
CAR CHOICE
100
90
80
Percentage
Choosing 70
Hybrid Car
60
50
40
Green Label
Energy Independence
Label
16
SUMMARY
•  Conservatives less in favor of energy efficiency
investment than liberals
•  Driven by polarization over environmental concerns
•  Ideology matters to environmental appeals
•  Leads to rejection of cost-saving energy efficient options
•  Bridging the ideological gap
•  Greater trans-ideological agreement about cost and
energy independence
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IMPLICATIONS
•  Two different strategies
•  Motivating the environmentally-concerned
•  Motivating the masses
•  Motivating the environmentally concerned
•  ENERGY STAR Program
•  “Join the movement to protect the climate.”
•  “You, too, can join the fight against climate change. Become an
ENERGY STAR partner today.”
•  Motivating the masses
•  One size fits all unlikely to be effective
•  Need to consider values of different groups
18
19
STUDY 2: LIGHT BULBS
•  Participants (N = 210) given $2 to purchase
incandescent (standard) or fluorescent (efficient)
•  Learned that fluorescent would:
•  Last for 9000 more hours
•  Result in a 75% reduction in electricity costs
•  Environmental Salience
•  Purchase of fluorescent came with blank sticker (No Label)
or Protect The Environment sticker (Green Label)
•  Upfront cost
•  Bulbs either the same price ($0.50) or fluorescent more $
($1.50)
Gromet, Kunreuther, & Larrick, 2013, PNAS
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VALUE EXPRESSIVENESS OF CHOICE
4
3.5
Value
Expressiveness
(1-7)
3
2.5
2
No Label
Environmental Label
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ONE ALTERNATIVE EXPLANATION
7
6
5
Environmental
Benefit (1-7)
4
3
More Liberal
More Conservative
2
1
0
No Label
Green
Label
Incandescent
No Label
Green
Label
Fluorescent
22
PERCEIVED VALUE SIMILARITY
6
5
Perceived
4
Similarity (1-7)
3
2
Green Label
Energy Independence
Label
23