Non-dirty dancing? Interactions between eco-labels and consumers

Current studies on eco-labeling have been limited because they either examine the relationship between individual characteristics and eco-behavior or between label characteristics and eco-behavior. We extend this literature by designing and testing a model that explicitly links how the characteristics of the individual and the information simultaneously influence an information program’s success. The specific application studies the potential effects of providing eco-information in the private market for passenger vehicles and light-duty trucks sold in the United States. The results point toward the importance of well-designed labeling practices as they significantly impact individuals’ perceptions of the eco-friendliness of products. Further, the importance of underlying psychological factors; and individuals’ priors of the product and of the environmental problem suggests a strong role for the long-run provision of eco-information, especially in cases where individuals hold incorrect perceptions.