Business Intelligence

Life Cycle Cost Disclosure,Consumer Behavior, And Business Implications

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Executive Summary

Comprehensive assessments of final consumption have identified "Housing" as a major contributor to total environmental impacts. Do consumers opt for more energy-efficient household appliances if they are provided with Life Cycle Cost (LCC) - that is, the sum of purchase price and operating cost estimated over the life span of the appliance? Physical energy figures shown on appliance labels may be cognitively demanding for consumers, whereas monetary information promises to simplify the decision problem. Despite the rising interest in monetary cost disclosure, its effectiveness relative to physical cost disclosure has not been rigorously evaluated. This research approached the question of effectiveness with an online field experiment for washing machines.

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