Chinese consumer responses to carbon labeling: evidence from experimental auctions

Abstract

With the growing anxiety over global warming, some groups have advocated the mandatory carbon labeling of products, whereas other groups have opposed such labeling. How consumers respond to carbon labels is a key question with important implications for both policy-makers and managers. Using a random nth-price auction experiment together with a questionnaire, we systematically examined the extent to which Chinese consumers care about environmental impacts and how their willingness to pay (WTP) is influenced by carbon labels. We have determined that WTP significantly increases for products with added carbon labels and decreases when the carbon emissions of a product increase. This response to carbon information disclosure is influenced by factors such as the gender and awareness of environmental pollution by the consumer. This study offers valuable insights to policy-makers and managers for carbon labeling promotion and product positioning.

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