Abstract
This study investigates the effectiveness of carbon footprint labeling as a behavioral nudge to promote sustainable consumption in the context of online grocery markets. Leveraging a quasi-experimental design, we employ a Difference-in-Differences (DiD) approach to analyze purchasing data from a large online grocery retailer following the staggered implementation of carbon labels on product pages. Our analysis, spanning over 1.2 million transactions from 85,000 unique customers, reveals a significant increase in the market share of lower carbon-intensive products in regions where the labels were introduced, compared to control regions. Specifically, we observe a 4.7% relative increase in the share of products with 'low' or 'very low' carbon footprints among treated customers. This effect is more pronounced in product categories where sustainable alternatives are readily available and among consumers with a history of environmentally conscious purchases. The findings underscore the potential of clear, accessible environmental information to influence consumer choice in digital retail environments, offering valuable insights for retailers aiming to enhance their sustainability profiles and for policymakers considering regulatory interventions to foster greener consumption.
