The impact of EU's energy labeling policy: An econometric analysis of increased transparency in the market for cold appliances in Denmark

In 2010 the EU decided to change the energy efficiency label for electrical appliances, so that the most effective appliances became more visible to consumers. We apply a Cointegrated Vector-Auto-Regressive (CVAR) model to assess the quantitative impact of this change on monthly sales (2005–2017) in the Danish markets for cold appliances of high and low efficiencies. The data support large effects with the expected signs. In particular, we find that the change increased sales of high-efficiency appliances by 55%, at the announcement, and by a further 42% when implemented. Sales of low-efficiency appliances were not affected by the announcement, but decreased, as a result of the implementation for online sales by 45%. These conclusions derive from the analysis of a well-specified VAR within which we take into account sample dependence, outliers and exogenous level shifts.