The effects of energy efficiency and environmental labels on appliance choice in South Korea

This paper investigates the effects of energy efficiency and environmental labels on households' choice of appliances, using a discrete choice experiment approach. Labeling programs currently operated by the South Korean government are considered in the empirical study, and the effects of such labels on appliance choice. This paper found that households showed a positive preference for labeled appliances, and an intention to pay more to purchase appliances with energy efficiency, and/or other environmental labels, with more value placed on energy efficiency labels than other environmental labels. The results of this study offer implications for both the government and manufacturers. For promotion of "green" appliances, it is recommended that the South Korean government expand the list of items mandatorily included in its labeling programs. For manufacturers, it is worth noting that consumers properly identify the information regarding energy efficiency, and environmental friendliness with reasonable monetary value. Thus, appliance manufacturers would be wise to concentrate on improving energy efficiency grades, and acquiring environmental labels.