Consumers’ Preferences for Energy-Efficient Air Conditioners in a Developing Country: A Discrete Choice Experiment Using Eco Labels

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The adoption of energy-efficient appliances has been studied in many developed countries in recent years. However, it is unclear how these findings translate to developing countries. We conduct a discrete choice experiment with a broad sample of potential air conditioner (AC) purchasers in Metropolitan Manila, where the percentage of AC owners has increased concomitant with the economic growth in the Philippines. We find that consumers have the strongest preferences for ACs made by domestic manufacturers with smart functions that enable consumers to save electricity more easily. In addition, we examine the information on eco labels that encourage consumers to choose an energy-efficient AC, including the default option of an energy efficiency ratio, estimated cost per hour or an energy star rating. The estimation results indicate that the probability of an energy-efficient AC being chosen could be increased by approximately 15 percentage points if the eco label uses an energy star rating rather than an energy efficiency ratio. These results have important implications for climate and energy policies for developing countries.