When Decimals Drive Decisions: The Effect of Precision in Environmental Product Information on Purchase Intention

ABSTRACT Firms increasingly disclose environmental product information. Yet little is known about how the format of such information shapes consumer responses. This research examines how the degree of numerical precision in environmental product information influences consumers' responses, particularly their purchase intentions and willingness to pay. Thereby, it applies signaling theory and the precision effect in the novel context of sustainable consumption. Drawing on a large‐scale survey of consumers in the United Kingdom, we show that higher numerical precision has a significant positive effect on purchase intentions. In a supplementary real choice experiment with German consumers, we provide indication that this effect extends to a real‐choice context. These findings highlight the relevance of the precision effect beyond the domain of price precision and contribute to signaling theory by indicating that numerical precision enhances the effectiveness of environmental information as a product signal. The results provide insights for marketers into the benefits of offering highly precise environmental information in the context of sustainable consumption. At the same time, they point to an ethical risk: Precise sustainability information could potentially also be used to greenwash environmentally harmful products.