Best in Class or Simply the Best? The Impact of Absolute Versus Relative Ecolabeling Approaches

Although research has widely investigated labels across a range of product domains, one understudied area is the use of absolute versus relative rating approaches to information provision. For example, under an absolute rating approach to vehicle ecolabels, the consumer is informed of the actual amount of fuel consumed during use of a vehicle compared with that of all other vehicles on the market. Under a relative rating approach, the fuel consumption is communicated in relative terms, comparing the vehicle only with others in the same class. The current research illustrates that switching from an absolute to a relative rating approach can lead to a reversal effect in the perception of a car’s environmental friendliness. For example, a sport-utility vehicle can be perceived as either environmentally friendly or not, depending on the type of rating approach used. The authors demonstrate that visual representation drives this effect, using a colored alphabetical rating scale to communicate environmental performance.