Carbon labelling influences on consumers’ behaviour: A system dynamics approach

Abstract

This paper proposes a system dynamics approach to model consumers' responses to carbon labelled products by showing how the number of consumers is varied visually. Three categories of the consumers are defined, i.e., potential, ordinary and loyal consumers, to reflect their different preferences to the carbon labelled products. Two case scenarios are presented to demonstrate the application of the proposed approach, in which the consumers' preferences to the carbon labelled and non-labelled milk, as well as the carbon labelled milk with different fat contents are simulated. The result shows that both of the two scenarios have the similar variation in the number of the defined consumers, and especially the number of loyal consumer accounts for the largest proportion. In addition, public awareness, education level, critical premium and perceived consumer effectiveness are identified as key factors to have an impact on the purchasing behaviour. The limitations of this approach are then discussed, laying a foundation for further work.