Love thy neighbor – reducing driving through green slot labels in e-commerce

Love thy neighbor-reducing driving through green slot labels in e-commerce A crucial aspect of corporate social responsibility and green consumerism is whether consumers wish to make sustainable choices and are willing to pay a premium for green goods and services. In the context of e-commerce, delivering products to consumers is a significant factor when discussing its sustainability. With the rapid growth of e-commerce and its related negative externalities, there is an emerging literature on the potential of nudging consumers towards more environmentally friendly delivery options. We contribute to this literature by exploring a quasi-natural experiment of green labeling, investigating revealed preference data from 35,828 Norwegian customers over almost five weeks in 2024. A green label was used on time slots to optimize the route planning, thereby minimizing driving and related externalities. We exploit the quasi-random property of the assignment mechanism of green labels, and a pricing randomized control trial, to estimate the effect of the label and the willingness to pay for green delivery. We assess the impact of the green label on the probability of a customer choosing a greener alternative by estimating a multinomial logit model. Results show that the probability of choosing a slot more than doubles when labeled as green. Moreover, we find a willingness to pay of € 1 for green delivery, ultimately suggesting that consumers value green services and that green labeling is an effective tool for online retailers to minimize delivery costs.