Contents lists available at ScienceDirect Transportation Research Part D journal homepage: www.elsevier.com/locate/trd The role of fuel cost information in new car sales William Brazil a,c , Steffen Kallbekken b, ⁎ , Håkon Sælen b , James Carroll a a Trinity College Dublin, College Green, Dublin 2, Ireland b CICERO Center for International Climate Research, PO Box 1129 Blindern, 0318 Oslo, Norway c Economic and Social Research Institute, Whitaker Square, Sir John Rogerson's Quay, Grand Canal Dock, Dublin 2, Ireland ARTICLE INFO Keywords: Fuel cost information Discrete choice experiment Labelling Energy efficiency gap Vehicle choice Information failure ABSTRACT Transitioning to more sustainable transport behaviours is key to achieving national and inter- national climate change objectives. Households can contribute to the new low carbon economy by switching to more energy efficient vehicles. In addition to societal and environmental benefits, such a change should lead to private benefits for households through lower energy expenses, while avoiding the perceived costs that could accompany a modal change in personal trans- portation (switching away from cars). This paper uses a discrete choice experiment (stated preference) to explore the effects of using alternative fuel cost labels on the demand for more efficient cars. Results show that reframing from fuel consumption (litres) to monthly fuel costs increases the willingness to pay for higher levels of fuel efficiency. More generally, these results highlight that informational interventions can be improved by framing information in a metric that is more salient and familiar to consumers. 1. Introduction The transport sector as a whole is a major contributor to global greenhouse gas emissions. In the EU28 in 2016, 20% of total emissions are attributable to road transportation, of which cars make up the largest share (61%) (European Environment Agency, 2018a). Furthermore, the decline in European road transport emissions has been relatively slow – between 2005 and 2016, road transport emissions decreased by just 3%, compared to 20% for total non-transport emissions. While the average carbon intensity (CO 2 /km) of new cars in the EU has declined by 16% since 2010 (European Environment Agency, 2018b), the share of low-carbon electric vehicles is currently just 1.1% (European Environment Agency, 2017). Government interventions to encourage households to switch to lower emission vehicles are therefore critical, both from the perspective of reducing the environmental externalities of private mobility, but also for the potential to increase household welfare through reduced energy costs. 1.1. Information failures Information is very important for consumer decision-making, and gaps resulting from lack of information may explain apparently non-rational decisions. Possible information failures affecting car purchases include asymmetric and imperfect information, rational inattention, hidden costs, and transaction costs. It is widely agreed that imperfect information can lead consumers towards making non-optimal choices (Allcott and Sweeney, 2015, Labandeira et al., 2012, Phillips, 2012). Car buyers, assuming they are cost/ emission-minimisers, need accurate fuel consumption/emission information in order to justify investing in more fuel efficient https://doi.org/10.1016/j.trd.2019.07.022 Received 30 October 2018; Received in revised form 17 June 2019; Accepted 22 July 2019 ⁎ Corresponding author. E-mail address: steff@cicero.oslo.no (S. Kallbekken). Transportation Research Part D 74 (2019) 93–103 1361-9209/ © 2019 Elsevier Ltd. All rights reserved. T