Empirical Investigations into Consumer Motivations for Environmentally Friendly Behaviors

My dissertation analyzes consumer motivations for engaging in environmentally friendly or "green" behavior. In the first chapter Magali Delmas and I conducted a field experiment to test the efficacy of information disclosure policies in motivating green behavior. Environmental damage is usually an unseen byproduct of other activities, with consumers and those around them unaware of the harm they are causing. Information disclosure, in the form of private information about the environmental impact of their own actions, can help consumers reduce the costs of conservation behavior or increase the moral benefit of conserving. If this same information is disclosed publicly, it provides an additional motivation for conservation — reputation. By making green actions visible, public information allows environmentally friendly behaviors to act as a signal of green virtue. We contrasted the efficacy of private information with that of public information in a unique field experiment in the residence halls at the University of California — Los Angeles. We provided private information to residents in the form of real-time feedback over energy usage and social norms, while public information was given in the form of a publicly visible energy conservation rating. While we found no average effect of private information, we did find that public information effectively motivated electricity users to reduce consumption by 20 percent. This reduction was sustained even after public information was no longer being disclosed.;In the second chapter, Ryan Vaughn and I examined whether the benefit of obtaining a "green" reputation can motivate environmentally friendly purchases. To do so, we investigated the green electricity product choices made by residents of a major California county. Here, residential electricity consumers had two choices if they wanted to use electricity generated by green sources: purchase a solar panel, or participate in a green-electricity program. Solar panels were on average 5 times more expensive than the green electricity program, yet achieved a similar environmental result. This indicates that there must be some non-pecuniary reward driving solar panel adoption. We hypothesized that solar panels, which are highly visible to friends and neighbors, act as a signal of "green" virtue, with this signal being more valuable in communities that value environmentally friendly behaviors. We tested this empirically and found that individuals living in greener neighborhoods were significantly more likely to purchase solar panels, regardless of their own green ideology, while neighborhood ideology had no effect on the green-electricity program. Moving the average resident from the brownest to the greenest neighborhood, would increase her chance of buying a solar panel by 5 fold. Given that neighborhood ideology only influences the choice of visible solar panels, but not unobservable green-electricity, we concluded that reputation can be a significant motivator of environmentally friendly behavior.;In the third-chapter and final chapter I worked with Magali Delmas to examine another type of environmental information disclosure policy, eco-labels. Eco-labels are often developed by third-parties separate to the industries that produce and sell the ecoproduct to create credibility. The goal of these agencies is to reduce the information asymmetry between producers and consumers over the environmental attributes of a good. However, by focusing on this information asymmetry, rather than how the label meets consumer needs, agencies may develop eco-labels that send an irrelevant, confusing or detrimental message to consumers. In a discrete choice experiment we examine two similar eco-labels for wine, one associated with a quality reduction and the other not. The majority of respondents in our study were unaware of the difference between the labels. We found that respondents preferred eco-labeled wines over an otherwise identical counterpart, when the price was low and the wine was from a low quality region. However these preferences were reversed if the wine was expensive and from a high quality region. These results indicate that respondents obtain some warm glow value from eco-labeled wine, but also interpret it as a signal of low quality. This provides a clear lesson for policy makers that focusing purely on information asymmetries will not necessarily create eco-labels that align eco-products with the needs of consumers.