A prominent explanation of the household 'energy efficiency gap' — consumers' underinvestment in cost-effective energy-efficient durables — is inattention to and imperfect information about lifetime energy costs. Rodemeier, Löschel and Kube (2017) showed in a randomized online survey in Germany (1,084 participants, 87% students) that informing consumers about lifetime electricity and replacement costs raises stated willingness-to-pay for an LED bulb by €2.53, and that participants underestimate the magnitude of LED savings. Whether such stated-preference effects generalize to real purchases, persist over time, and translate into cost-effective point-of-sale information policy relative to financial instruments remained open. Later field experiments have resolved parts of this agenda — most notably the same authors' large-scale experiment with a European lighting retailer, which shows real demand responses to information nudges that interact strongly with subsidies. What remains open is the linked three-part core: the quantitative calibration between stated and real, incentive-compatible willingness-to-pay effects; the mechanism (temporary salience versus durable correction of beliefs) and its persistence in mature markets; and the cost-effectiveness comparison of information against financial incentives such as purchase subsidies.

Background

Households appear to underinvest in energy-efficient technologies even when the savings in electricity costs exceed the additional purchase price; this pattern is known as the energy efficiency gap. Among the candidate frictions, two have received particular attention: inattention, meaning that buyers focus on the visible purchase price and ignore operating costs that accrue over the product's life, and imperfect information, meaning that buyers hold biased beliefs about the size of the energy savings. Lighting is a canonical testing ground because the technologies differ enormously in lifetime cost while the upfront prices are small: a light-emitting diode (LED) bulb uses roughly 90% less electricity than an incandescent bulb delivering the same brightness and lasts much longer, whereas compact fluorescent lamps (CFLs), the earlier efficient technology, are slow to reach full brightness and were unpopular.

The baseline evidence for this problem comes from a randomized controlled trial run as an online survey in Germany (Rodemeier, Löschel and Kube, 2017). Participants made hypothetical purchase choices between a 40 W incandescent and a 5 W LED bulb at varying prices, from which a stated willingness-to-pay (WTP) — the amount a person says they would pay, as opposed to what they demonstrably pay in a real transaction (revealed preference) — was inferred. A randomly assigned treatment group saw an information screen about average differences in electricity and replacement costs between the two bulbs. The information raised stated WTP for the LED by €2.53 on average (€2.71 without controls). Participants generally knew LEDs save costs but underestimated the magnitude of the savings, and many confused LED attributes with disliked CFL attributes (for example, warm-up time, which LEDs do not have). The study follows Allcott and Taubinsky (2015), who combined a similar information-disclosure experiment in the US lightbulb market with an incentive-compatible component — an elicitation in which stated choices had real financial consequences for participants, so that misreporting is not privately optimal — and found a $2.54 WTP increase for CFLs, and who derived the implied Pigouvian subsidy, i.e. a subsidy set equal to the external environmental benefit of efficient lighting.

Three methodological caveats define the open problem. First, stated-preference estimates are vulnerable to hypothetical bias: valuations elicited without real consequences systematically differ from behavior, although the meta-analysis of List and Gallet (2001) found this bias to be smaller for private goods like light bulbs than for public goods. Second, the sample was young and highly educated (87% students), and third, a single hypothetical choice cannot distinguish whether information works by durably correcting beliefs or merely by making energy costs temporarily salient — a distinction that matters for policy, because a salience effect fades while a corrected belief changes all future decisions. Since 2017, this landscape has changed substantially: field experiments with real retailers now exist (Rodemeier and Löschel, 2025; Boogen, Daminato, Filippini and Obrist, 2022; Stadelmann and Schubert, 2018; Solà, Escapa and Galarraga, 2023; d'Adda, Gao and Tavoni, 2022), an incentivized field experiment has measured information effects on WTP in China (Beattie, Ding and La Nauze, 2022), a ten-month follow-up has measured persistence there (Gao and Tavoni, 2024), and stated-versus-revealed gaps have been measured in an adjacent pro-environmental market (Rodemeier, 2025). What these works jointly leave unresolved is stated below.

Problem Statement

The overarching objective is to establish, with real-market evidence, whether correcting consumers' misperceptions of the financial benefits of energy-efficient lighting is a valid and cost-effective policy lever — generalizing the stated-preference evidence of Rodemeier, Löschel and Kube (2017) beyond hypothetical choices by a young, educated sample. Three linked questions constitute the open core. (1) Calibration: how large is the gap between information effects estimated from stated (hypothetical) willingness-to-pay — such as the €2.53 effect for LED bulbs in Germany — and the WTP-equivalent of the effects of comparable information on actual or incentive-compatible purchase behavior in mature lighting markets (established retail markets with broad LED availability in high-income economies, such as Germany's, as distinct from developing markets such as China, where the available long-run evidence was collected)? (2) Mechanism and persistence: does information operate through durable correction of biased beliefs or through temporary salience and attention shifts; do corrected beliefs and changed purchase behavior persist over time in mature markets, and for whom? (3) Policy comparison: how do point-of-sale, packaging, and label information policies compare with financial incentives such as purchase subsidies in cost-effectiveness per unit of additional energy savings, accounting for documented interactions — including information reducing the salience and effectiveness of subsidies, and overestimation of savings by some populations? The components are linked by the common question of whether information treatments on lighting efficiency translate into real, durable, and cost-effective energy savings. A component scoped to mature markets is resolved on in-scope, mature-market evidence; evidence from developing markets such as China does not substitute for it, and where no in-scope evidence exists the required answer is an explicit statement of that in-scope evidence gap.

References

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