Factors Affecting Consumer Assessment of Eco-Labeled Traditional Fuel Passenger Vehicles

Acknowledging and understanding the role that information may play in affecting consumer assessment of eco-marketed products is a key step in improving the effectiveness of eco-labeling initiatives. Consumers who hold preferences for environmentally preferred products may be unable to express their preferences for such goods under current eco-information campaigns. The emerging use of eco-labels suggests they may be an effective means of communicating the environmental attributes of a product to consumers, and thus provide an opportunity for consumers to alter their consumption behaviors. This analysis employed a statewide sample of Maine registered vehicle owners in a survey effort aimed at determining the factors which affect their assessments of eco-labeled traditional-fueled passenger vehicles. The study focuses on two specific areas. The first develops an appropriate empirical framework with which to model the vehicle choice decision under eco-labeled conditions. We specifically examine how eco-information may affect the two-stage vehicle purchase process. Additionally the study focuses on whether consumers react to information regarding specific pollutants homogenously or heterogeneously based on the personal characteristics of the consumer. The study builds upon environmental economic and psychology literature in examining the role of personal characteristics such as perceived effectiveness of consumer purchase decisions and perceptions of the eco-labeled products as factors in the vehicle purchase decision. It was found that environmental attributes of an eco-labeled passenger vehicle are significant in the purchase decision. The eco-information is considered in the vehicle purchase decision, but is generally not considered at the class level decision. These results have policy ramifications for current eco-labeling initiatives that do not consider the two-stage nature of the vehicle purchase decision. Of additional importance, consumers reacted differently to the two primary pollutants contained on the emission profiles of the vehicles, indicating that future eco-labeling initiatives should provide specific emissions information for eco-labeled vehicles. Personal perceptions are significant in the purchase decision, which suggests an avenue of enhancing the effectiveness of eco-labeling initiatives through educational campaigns to alter incorrect preconceived perceptions. The analysis provides important information for policy makers. First, policy makers should recognize the two-stage nature of the vehicle purchase decision and adjust current eco-labeling programs accordingly. The results also suggest that the differing consumer response to the various pollutants indicate that future eco-labeling initiatives should reveal specific information about the environmental attributes of the vehicles in order to achieve maximum effectiveness. Finally, the examination of the relationship between consumer perceptions and environmentally preferred …