Giving Green to Get Green: Incentives and Consumer Adoption of Hybrid Vehicle Technology
TL;DR: In this paper, the relative efficacy of state sales tax waivers, income tax credits and non-tax incentives for hybrid-electric vehicle adoption in the United States has been studied and shown that the type of tax incentive offered is as important as the value of the tax incentive.
Abstract: Federal, state and local governments use a variety of incentives to induce consumer adoption of hybrid-electric vehicles. We study the relative efficacy of state sales tax waivers, income tax credits and non-tax incentives and find that the type of tax incentive offered is as important as the value of the tax incentive. Conditional on value, we find that sales tax waivers are associated a seven-fold greater increase in hybrid sales than income tax credits. In addition, we estimate the extent to which consumer adoption of hybrid-electric vehicles (HEV) in the United States from 2000-2006 can be attributed to government incentives, changing gasoline prices, or consumer preferences for environmental quality or energy security. After controlling for model specific state and time trends, we find that rising gasoline prices are associated with higher hybrid sales, although the effect operates entirely through sales of the hybrid models with the highest fuel economy. In total, we find that tax incentives, rising gasoline prices and social preferences are associated with 6, 27 and 36 percent of high economy hybrid sales from 2000-2006.
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TL;DR: In this article, the authors show that consumers underreact to taxes that are not salient, and that even policies that induce no change in behavior can create efficiency losses, implying that the economic incidence of a tax depends on its statutory incidence.
Abstract: Using two strategies, we show that consumers underreact to taxes that are not salient. First, using a field experiment in a grocery store, we find that posting tax-inclusive price tags reduces demand by 8 percent. Second, increases in taxes included in posted prices reduce alcohol consumption more than increases in taxes applied at the register. We develop a theoretical framework for applied welfare analysis that accommodates salience effects and other optimization failures. The simple formulas we derive imply that the economic incidence of a tax depends on its statutory incidence, and that even policies that induce no change in behavior can create efficiency losses. ( JEL C93, D12, H25, H71)
1,903 citations
TL;DR: In this paper, the authors identify potential socio-technical barriers to consumer adoption of EVs and determine if sustainability issues influence consumer decision to purchase an EV, and provide valuable insights into preferences and perceptions of technology enthusiasts; individuals highly connected to technology development and better equipped to sort out the many differences between EVs and CVs.
1,207 citations
TL;DR: In this paper, the authors examined the relationship between financial incentives, charging infrastructure, and local presence of production facilities to determine the relationship of one such policy instrument (consumer financial incentives) to electric vehicle adoption.
895 citations
TL;DR: In this paper, the authors examine consumer stated intent to purchase plug-in electric vehicles and assesses the factors that increase or decrease interest in electric vehicle adoption, finding that consumers who express early interest in adopting electric vehicles are typically highly educated, previous owners of conventional hybrids, environmentally sensitive, and concerned about dependence on foreign oil.
Abstract: This paper examines consumer stated intent to purchase plug-in electric vehicles and assesses the factors that increase or decrease interest. We surveyed adult drivers in large US cities in early fall 2011, before vehicle manufacturers and dealers began marketing campaigns. The survey responses thus document early impressions of this transport technology. We find that, given current battery technology and public perceptions, overall stated intent to purchase or lease electric vehicles is low. Interest in plug-in hybrid technology is somewhat greater than interest in all-electric technology. Consumers who express early interest in adopting electric vehicles are typically highly educated, previous owners of conventional hybrids, environmentally sensitive, and concerned about dependence on foreign oil. Enhanced fuel economy, the primary tangible advantage of plug-in technology, is recognized as favorable by respondents but fails to exert a strong influence on purchasing intentions. Interest in plug-in electric vehicles is shaped primarily by consumers’ perceptions of electric vehicle disadvantages.
470 citations
Cites background or result from "Giving Green to Get Green: Incentiv..."
...Keywords Electric vehicles; Transportation; Technological competition; Public policy; Policy incentives...
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...These results are generally consistent with previous findings from focus groups and previously conducted limited surveys (e.g., Gallagher and Muehlegger, 2011; Gärling and Thøgersen, 2001; Heffner et al., 2007; Kahn, 2007; Kurani and Turrentine, 2007; Ozaki and Sevastyanova, 2011)....
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...Figure 2 indicates that respondents consider fuel economy as the primary advantage of plug-in vehicles: 42% of respondents believe it is a major advantage and 36% believe it is somewhat advantageous....
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TL;DR: In this paper, a sample of 433 respondents has been collected in China to predict the customers' intention to adopt HEVs, using an extended model of the theory of planned behavior (TPB).
Abstract: China is a major energy-consuming country and is under great pressure to improve its energy efficiency as well as reduce its carbon emissions. Hybrid electric vehicles (HEVs), as an energy-efficient transport innovation, have the potential to reduce gasoline consumption, carbon emissions and alleviate environmental problems. Diffusion of HEVs’ adoption is a significant initiative. A sample of 433 respondents has been collected in China to predict the customers’ intention to adopt HEVs, using an extended model of the theory of planned behavior (TPB). The empirical results show that the attitude toward HEVs, subjective norm, perceived behavioral control (the three primary elements of the TPB model) and personal moral norm partially mediate the effect of consumers’ environmental concern on their intention to adopt HEVs. Consumers’ environmental concern affects the adoption intention indirectly and is significantly positively related to the attitude toward HEVs, subjective norm, perceived behavioral control and personal moral norm, which in turn influence the adoption intention positively. The results confirm the appropriateness of the TPB model and verify that the extended TPB model has good explanatory power in predicting consumers’ intention to adopt HEVs. Based on the empirical results, we discuss the implications for promoting the adoption of HEVs and provide suggestions for future study.
432 citations
Cites background from "Giving Green to Get Green: Incentiv..."
...To some extent, provision of a subsidy for HEVs may be an effective way to lower the price (Gallagher and Muehlegger 2011)....
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References
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Book•
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TL;DR: A history of diffusion research can be found in this paper, where the authors present a glossary of developments in the field of Diffusion research and discuss the consequences of these developments.
Abstract: Contents Preface CHAPTER 1. ELEMENTS OF DIFFUSION CHAPTER 2. A HISTORY OF DIFFUSION RESEARCH CHAPTER 3. CONTRIBUTIONS AND CRITICISMS OF DIFFUSION RESEARCH CHAPTER 4. THE GENERATION OF INNOVATIONS CHAPTER 5. THE INNOVATION-DECISION PROCESS CHAPTER 6. ATTRIBUTES OF INNOVATIONS AND THEIR RATE OF ADOPTION CHAPTER 7. INNOVATIVENESS AND ADOPTER CATEGORIES CHAPTER 8. DIFFUSION NETWORKS CHAPTER 9. THE CHANGE AGENT CHAPTER 10. INNOVATION IN ORGANIZATIONS CHAPTER 11. CONSEQUENCES OF INNOVATIONS Glossary Bibliography Name Index Subject Index
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TL;DR: Diffusion is the process by which an innovation is communicated through certain channels over time among the members of a social system by concerned with the spread of messages that are perceived as new ideal.
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TL;DR: In this article, the authors developed techniques for empirically analyzing demand and supply in differentiated products markets and then applied these techniques to analyze equilibrium in the U.S. automobile industry.
Abstract: This paper develops techniques for empirically analyzing demand and supply in differentiated products markets and then applies these techniques to analyze equilibrium in the U.S. automobile industry. Our primary goal is to present a framework which enables one to obtain estimates of demand and cost parameters for a class of oligopolistic differentiated products markets. These estimates can be obtained using only widely available product-level and aggregate consumer-level data, and they are consistent with a structural model of equilibrium in an oligopolistic industry. When we apply the tech- niques developed here to the U.S. automobile market, we obtain cost and demand parameters for (essentially) all models marketed over a twenty year period.
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Additional excerpts
...[3] report own-price elasticities of "6....
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TL;DR: In this article, the authors show that consumers underreact to taxes that are not salient, and that even policies that induce no change in behavior can create efficiency losses, implying that the economic incidence of a tax depends on its statutory incidence.
Abstract: Using two strategies, we show that consumers underreact to taxes that are not salient. First, using a field experiment in a grocery store, we find that posting tax-inclusive price tags reduces demand by 8 percent. Second, increases in taxes included in posted prices reduce alcohol consumption more than increases in taxes applied at the register. We develop a theoretical framework for applied welfare analysis that accommodates salience effects and other optimization failures. The simple formulas we derive imply that the economic incidence of a tax depends on its statutory incidence, and that even policies that induce no change in behavior can create efficiency losses. ( JEL C93, D12, H25, H71)
1,903 citations
"Giving Green to Get Green: Incentiv..." refers background in this paper
...[6] and Finkelstein [8] that find consumer response to taxation varies with the salience of the tax....
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TL;DR: In this paper, the authors used a subsample of the 1975 survey of 3249 households carried out by the Washington Center for Metropolitan Studies (WCMS) for the Federal Energy Administration for the purpose of testing the statistical exogeneity of appliance dummy variables typically included in demand for electricity equations.
Abstract: Recent micro-simulation studies of the demand for clectricity hy residences have attempted to modlel jointly the demand for appliance and the denmanid for electricity by appliance. Within this context it becomes important to test the statistical exogeneity of appliance dummy variables typically included in demand for electricity equations. If, as the theory would suggest, the demand for durables and their use are related decisions by the consumer, specifications which ignore this fact will lead to biased and inconsistent estimates of price and income elasticities. The present paper attempts to test this bias using a subsample of the 1975 survey of 3249 households carried out by the Washington Center for Metropolitan Studies (WCMS) for the Federal Energy Administration. We discuss and derive a unified model of the demand for consumer durables and the derived demand for electricity. To determine the magnitude of the bias resulting from estimating a unit electricity" consumption (UEC) equation bv ordinary least squares when unobserved factors influence both choice of appliances and intensity of use. we intr-oduce and cstimate a joint water-heat space-heat choice model, and concluide with the consistent estimation and specification of demand for electricity equations.
1,667 citations
"Giving Green to Get Green: Incentiv..." refers background or result in this paper
...Beginning with Hausman [12] and Dubin and McFadden [7], the empirical literature estimates implicit discount rate by examining consumers’ relative weights of upfront cost and future energy costs when deciding between more and less energy-efficient durable goods....
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...Interestingly, our benchmark estimates are close to previous estimates of implicit discount rates for consumer durable goods—Hausman [12] and Dubin and McFadden [7] estimated discount rates of 20% and 20....
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