Best in Class or Simply the Best? The Impact of Absolute versus Relative Ecolabeling Approaches

Abstract

Although research has widely investigated labels across a range of product domains, one understudied area is the use of absolute versus relative rating approaches to information provision. For example, under an absolute rating approach to vehicle ecolabels, the consumer is informed of the actual amount of fuel consumed during use of a vehicle compared with that of all other vehicles on the market. Under a relative rating approach, the fuel consumption is communicated in relative terms, comparing the vehicle only with others in the same class. The current research illustrates that switching from an absolute to a relative rating approach can lead to a reversal effect in the perception of a car's environmental friendliness. For example, a sport-utility vehicle can be perceived as either environmentally friendly or not, depending on the type of rating approach used. The authors demonstrate that visual representation drives this effect, using a colored alphabetical rating scale to communicate environmental performance.

The Double-Edged Sword of Ethical Nudges: Does Inducing Hypocrisy Help or Hinder the Adoption of Pro-environmental Behaviors?

“…Even small changes in the decision environment determine if measures for initiating pro-environmental behavior are effective. In the domain of fuel efficiency, for instance, changing only one element in the design of a car's eco-label can flip the effect, even though the label's original purpose is to support a proenvironmental evaluation (Hille et al 2018). Likewise, in terms of utilizing hypocrisy, this study identifies situational and personal factors as critical determinants of ethical consumption.…”

Revisiting the promise of carbon labelling

“…In a direct comparison of fuel efficiency and cost information with environmental impact information, Codagnone et al 119 found fuel efficiency labeling had the greatest impact (see also ref 120 ). Galarraga et al 121 found that both relative (compared to other vehicles) and absolute ratings of fuel efficiency can matter, but which matters depends on whether consumers are making choices within a class of vehicles (e.g., sedans) or across all classes, an indication of the complexities that have to be considered in designing effective labeling strategies (see also ref 122 ). A variety of other studies find that labels can have an impact on willingness to spend more for a fuel-efficient vehicle but, again, the results are complex, with the effect of energy efficiency or carbon labels depending on factors such as the kind of benefits from low fuel consumption that were signaled 123,124 .…”

Energy efficiency of consideration sets and choices: the impact of label format

“…These differences may represent alternative explanations, which cannot be ruled out. For example, certain label alternatives may stand out more, which might increase attention to them and hence their effectiveness (salience bias; Hille et al , 2018). Furthermore, as noted earlier, the class-plus-meaning and class-plus-scale labels bear more similarities to the traditional energy label, which might have improved attribute evaluability by facilitating the retrieval of relevant reference information from memory (Hsee and Zhang, 2010; Stewart et al , 2006).…”