Consumers judge environmentally friendly goods and services on the basis of stereotypes, which often turn out to be wrong. As one might expect, green stereotypes are frequently positive, and lead people to perceive green goods as better than they actually are — but sometimes green stereotypes are negative, which producers and public officials ought to keep in mind as they try to nudge the market in a more sustainable direction.
Take organic food as an example. An experimental study by researchers at Cornell University looked at the effect of labeling processed food as organic. The participants were recruited from a local shopping mall in Ithaca, N.Y., and were asked to taste pairs of food samples, such as cookies, potato chips and yogurt.
One item in each pair was labeled “organic” and the other item was labeled “regular” — although the items in fact were identical (and, incidentally, organically produced). When participants compared the otherwise indistinguishable samples, they generally were willing to pay more for those with organic labels — and also guessed that they had a lower calorie count. The organic labels even made participants estimate that the food samples had higher fiber content and were more nutritious.
People's tendency to let an impression created in one area influence their opinion in another area is often called a “halo effect.” This cognitive bias appears in countless situations in our everyday lives, and it has been repeatedly demonstrated in pro-environmental contexts.
The same coffee, for example, typically is found to taste better if it is labeled “eco-friendly.” One experiment even concluded that the color green makes a difference; candy bars with a green, rather than a red, calorie label made participants perceive the former as more healthful, even though the two labels clearly showed the same calorie content.
Marketing experts of course have long been aware of halo effects. People who read nutrition labels have probably come across the term evaporated cane juice. According to many experts, evaporated cane juice is just sugar. Whether or not that's entirely accurate — there's a dispute — producers use the term because they think it's more appealing to consumers, in part because it sounds more natural.
Consumers, however, do not always prefer to go green. An NPR-Thomson Reuters Health Poll found that about a third of Americans actually favor non-organic over organic food. The primary reason behind this preference? They assume that organic options are more expensive.
In some situations, eco-friendly products may be stereotyped as less effective or of lower quality. In one study, participants were asked to judge the effectiveness of a fictitious formula drink to combat starvation. The drink was described as either organic or not.
Oddly, those who rated themselves as highly environmentally concerned were in fact more likely to say they thought the drink described as organic would be less effective than the conventional one.
Recent research we conducted demonstrates a much larger point, bearing directly on current climate change initiatives: Consumers may well leap to negative conclusions about environmentally friendly energy programs. In a study published last week, we asked 1,245 Americans about their views on green energy. Through an online survey, we presented participants with a choice among hypothetical energy programs.
One group was offered the option of enrolling in a new program offered by the state government that would provide households with electricity from eco-friendly sources. Another group was offered exactly the same program, but we added a sentence stating that the cost and quality would be identical to that of their current energy provider.
We found that participants were substantially more likely to state that they wanted to enroll when we highlighted the identical cost and quality of the green energy program. By itself, that result is not so surprising, but it has two important implications.
First, many people seemed to have assumed, without any evidence, that green energy, as such, would come at a higher price and/or be of lower quality.
Second, simply making it clear that the price and quality would be identical to a less environmentally friendly option eased many people's qualms.
Green, then, is perceived as better — unless it isn't. Some wrongly project desirable characteristics onto environmentally friendly goods and services; others wrongly do the opposite. Producers and policymakers beware: There's no guarantee that green labeling, in the absence of basic clarifying information, will entice consumers.
Cass R. Sunstein, the former Administrator of the White House Office of Information and Regulatory Affairs, is a professor at Harvard Law School and author of The World According to Star Wars. Twitter: @CassSunstein
Simon Hedlin is a public policy researcher and a contributor to The Economist. Twitter: @simonhedlin