Time, product features and the role of information framing in choices of more efficient appliances
Louviere, J and Hattom MacDonald, D and Rose, J, Time, product features and the role of information framing in choices of more efficient appliances, International Choice Modelling Conference, July 3-5, Sydeny (2013) [Conference Extract]
Reductions in household water and energy consumption can be encouraged through major appliance choices in the residential market. Governments are trying to increase uptake of energy-efficient appliances and water-efficient appliances in response to urban water supply shortages and/or associated with climate change policies. Strategies to increase uptake of efficient appliances include rebates and green information campaigns, which have been trialled in Australia with varying success, in turn suggesting that changing consumer behaviour is not simple. Appliance choice is first and foremost a consumer decision involving brand, product features and purchase price. However, consumer choices may be influenced by an individual’s environmental views, whether an individual is engaged as a citizen or reminded of prevailing social norms, as well as many other possibilities. Embedded in this choice problem are complex trade-offs involving initial capital costs, operating costs and product lifespans that reflect differences in how people discount costs and benefits at different points in time. More broadly we use the term rates of time preference to cover the scenario of preferring immediate utility over delayed utility (Frederick, Lowenstein and O’Donoghue 2004).
We developed an online, webpanel survey to study the relationship between rates of time preference and information conditions. We screened for likelihood of purchase of such household appliances (having recently purchased or being interested in purchasing in the near future), and invited 9,000 randomly selected individuals qualified individuals from a major Australian internet panel provider (Pureprofile) to participate in a survey that focused on dishwashers or washing machines. Thus, our sample consists of people (respondents) who are "in the market" for these appliances. We eventually obtained a sample of 2410 respondents in response to a two-week recruiting campaign in March 2012.
The survey was based on several discrete choice experiments (DCEs) with additional questions designed to measures environmental attitudes, opinions and values, as well as sociodemographic and similar questions consistent with those asked in the Census of Population. We designed and implemented several between-subjects conditions associated with the DCEs to test several policy-relevant behavioural hypotheses about the role of social norms and engaging individuals as part of their community. We estimated an implied rate of time preference from the DCEs, and found that rates of time preference vary only marginally under various informational conditions. Our results suggest that (for the Australian market at least) there are distinct market segments who are more likely to respond to messages about community norms. In turn, this suggests that particular communication strategies might be more effective for certain market segments, and that one must focus not only on product features and prices, but also message and information framing to produce desired and desirable behavioural responses and outcomes.