The Effects of Energy Cost Labelling on Appliance Purchasing Decisions: Trial Results from Ireland

Household failure to minimize the total costs of energy-consuming investments has become known as the “energy efficiency gap.” This paper explores if this is partly the result of imperfect information related to future energy costs. We test this hypothesis by adding 5-year consumption cost labels to the tumble dryer lineup of four outlets of an Irish electrical retailer. Although we observe a reduction in the average energy consumption of dryer sales, our analysis does not show a statistically significant effect. However, we highlight a number of experimental limitations in our trial which potentially undermine this treatment effect. In addition, mixed findings from previous research suggest that further trials should be conducted before “lifetime” energy cost labelling is removed from potential policy options to increase the energy efficiency of household appliances.