“Conspicuous Conservation” and the Prius Effect

The height of conspicuous conservation? (Photo: Toyota)

This month, Toyota sold its one millionth Prius hybrid in the U.S. In 10 years, this strange-looking vehicle with the revolutionary engine has claimed a spot among the best-selling cars. Pretty impressive. But are all those Prius owners thinking mainly about better mileage and a smaller carbon footprint, or is there another incentive at work? More broadly: when people make environmentally sound choices, how much are those choices driven by the consumers’ desire to show off their green bona fides?

Two young economists, Steve and Alison Sexton, have been looking into this question. (Not only are the Sextons twins, but their parents are also economists, and Steve is a competitive triathlete.) The result is an interesting draft paper called “Conspicuous Conservation: The Prius Effect and WTP [Willingness to Pay] for Environmental Bona Fides.” When you drive a Prius, the Sextons argue, there’s a “green halo” around you. You make new friends; you get new business opportunities. In an especially “green” place like Boulder, Colo., the effect could be worth as much as $7,000.

The Sextons focused on the distinctive design of the Prius — which was no accident. Honda, Ford, Nissan and other car makers sell hybrids, but you can’t pick them out on the road (the Civic hybrid, for instance, looks just like a Civic). The Prius is unmistakable. It marks whoever is driving it as someone who cares about the environment; it’s an act of “conspicuous conservation,” an update of Thorstein Veblen’s “conspicuous consumption.” Here’s how Steve Sexton describes it:

SEXTON: A sort of “keeping up with the Joneses”-type concept but applied to efforts to make society better. I will be competing with my neighbors to donate to a charity, for instance, or to reduce energy conservation or environmental impacts.

On Marketplace, just in time for Earth Day, Stephen Dubner talks to Kai Ryssdal about this and other forms of conspicuous conservation.

Here’s where to find Marketplace on a radio station near you.

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  1. Joseph Steig says:

    What drives me a bit batty–as a self-professed car guy–is that no one comments on what an utterly brilliant design the Prius is completely aside from the fact that it’s a hybrid. The thing has better space utilization than any car on the road today in the United States. Even without being a hybrid, it deserves to be a best seller because it’s so large on the inside for its relatively small outside. Additionally, there IS NO PRIUS PRICE PREMIUM. I simply can’t understand how people can calculate that. It’s about the same price as a Camry or Accord, but has more space inside. and gets better mileage. With this study saying you get added green halo effects, it’s even more of a bargain. And no, I don’t own one…yet.

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  2. mark o says:

    i have a client who is obsessed with his hi-profile energy conservation mode.
    he’s addicted to the local press and his image.
    and…he won’t insulate one of his buildings that is leaking energy like a sieve.
    insulating a bldg will never bring sweet press.
    sad but true.

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  3. Logan says:

    There are people who purchase a Prius for “conspicuous conservation” but, the researchers data is flawed if they choose a Honda Civic Hybrid as a control (or any other car for that matter). I believe it is reasonable to assume the average person in the market of a hybrid vehicle is interested in the following attributes: cost to own, performance, and environmental effects.
    Cost to own – The researchers were correct in that the purchase cost of the vehicles are very similar. However, the Prius gets an additional 6mpg over the civic. This is a significant and will save the owner 2200 dollars over the life of the car.
    Environmental Effects – Again, the 6 mpg advantage is significant.
    Performance – The Prius handles well and despite popular belief, has more than enough power to drive efficiently and safely. I will assume the Civic is also capable in this manner. However, there is a feature more fundamental to automobile performance than acceleration, the ability to transport stuff from point A to point B. The prius literally has more than twice the cargo space of the civic hybrid. That is a remarkle advantage. I think we can safely assume that there is a correlation between hybrid ownership and passion for outdoor activities. Outdoor activities often require great amounts of gear and thus, we should assume the additional cargo space of a Prius is a very desirable quality among hybrid owners.

    I think this topic of economics is intriguing and worth researching but, the quality of the research discussed in this podcast was disappointing.

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  4. trol says:

    i drag race im my hibrid

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  5. liam says:

    The problem with Steve and Alison’s study is that they ignore the fact that people like to show that the conservation movement has momentum. They may be more confident about making the effort to show that they are part of the movement when the movement is bigger. They also ignored a big alternate hypothesis: that people in anti-environmental regions may be afraid to exhibit obvious environmentalist tendencies. I grew up in Idaho, where one may feel nervous admitting that they were environmentalists, road a bike, drove an efficient car. Guys in some bars look at you sideways if drove up in something other than a truck.

    I commute by bike, and I am convinced that people are more likely to ride if they see that I can ride to work with out difficulty.

    On the point about solar panels, efficiency is not just about sun, it is also about not overheating solar panels. This helps with efficiency in SF and Seattle.

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  6. Zurdo says:

    Good article, they didi not provide the financial analysis:

    20,000 miles per year at 20 mpg in previous car = 1000 gallons
    20,000 miles per year at 50 mpg in 20102 Prius =400 gallons
    Annual savings 600 gallons times $4 per gallon= $2400 per year

    In addition to being Conspicuous Conservation it has a great pay back
    10 years the car is free

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  7. Scott says:

    The Prius gets 51 mpg, while the comparison car, the Honda Civic Hybrid gets 41mpg. This is a 20% difference, more than enough to explain the difference in popularity. Also, the Prius’ design allows it to get better mpg due to aerodynamics.

    I was disappointed that these issues were not addressed in this report.

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  8. tom murphy says:

    Don’t forget the lower weight of the Prius-the ultimate gas saver. I don’t remember owning so light a car since the 1960′s!

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