The Effect of Energy Efficiency Relabeling on Purchase Decisions: Quasi-experimental Evidence from the EU

We assess the impact of the 2021 relabeling of the EU energy label from A-plus categories to an A-G letter scale on sales of energy-related household appliances. Using granular purchase data in the refrigerator and freezer market, we find that sales shares of relabeled models in the least efficient label classes decrease after relabeling, suggesting that consumers switch from lower to higher efficient categories when confronted with the new energy label. We find evidence that this decrease is due to the combined effect of a clear letter scale and a reduction in the coarseness of label classes, i.e. the splitting of the medium A++ label into E and F classes.

Working Paper