A Research Note on the Propensity of Consumers to Internalize Environmental Costs

Consumers are thought to make more environmentally sustainable consumption choices when they have access to information on a product’s life-cycle costs, rather than just purchase price. This quasi-experimental study examines consumer reactions to the inclusion of projected energy and carbon costs in print ads for a TV, using an online survey of 2,566 Australian consumers, and then determines whether these reactions are moderated by consumers’ temporal orientation (past versus future). Participants rated ads that included energy and carbon costs as the most useful for buying a TV and as having higher perceived value. However, there was no impact on likelihood of purchase. Participants with a high temporal orientation to the past reacted less favorably to ads that included carbon costs. This study shows that informing consumers about life-cycle costs does not have a major impact on purchase decisions for durable goods; however, it does affect perceptions of value and perceptions of the usefulness of the advertised pricing information.