Hey Baby, Is That a Prius You’re Driving?

For about $20 you can announce your environmental bona fides with a canvas tote that says "I'm not a plastic bag." (Mario Tama/Getty Images)

Remember when keeping up with the Joneses meant buying a diamond-encrusted cigarette case? Such ostentatious displays of wealth during the Gilded Age prompted economist Thorstein Veblen to coin the term conspicuous consumption.

Conspicuous consumption has hardly gone away — what do you think bling is? — but now it’s got a right-minded cousin: conspicuous conservation. Whereas conspicuous consumption is meant to signal how much green you’ve got, conspicuous conservation signals how green you are. Like carrying that “I’m not a plastic bag” bag, or installing solar panels on the side of your house facing the street — even if that happens to be the shady side.

Conspicuous conservation is the theme of our latest podcast, called “Hey Baby, Is That a Prius You’re Driving?” (You can download/subscribe at iTunes, get the RSS feed, listen live via the embedded media player, or read the transcript here.) It centers around a paper by Alison and Steve Sexton, a pair of Ph.D. economics candidates (who happen to be twins, and who happen to have economist parents), called “Conspicuous Conservation: The Prius Effect and Willingness to Pay for Environmental Bona Fides.” Why single out the Toyota Prius?

S. SEXTON: The Honda Civic hybrid looks like a regular Honda Civic. The Ford Escape hybrid looks like a Ford Escape. And so, our hypothesis is that if the Prius looked like a Toyota Camry or a Toyota Corolla that it wouldn’t be as popular as it is. And so what we set out to do in this paper is to test that empirically.

The question they really wanted to answer was this: how much value do people who lean green place on being seen leaning green? The Sextons found that the Prius’s “green halo” was quite valuable — and, the greener the neighborhood, the more valuable the Prius is.

You’ll also hear from the British writer/economist Tim Harford (author, most recently, of Adapt), who nimbly tracks conspicuous conservation in his own country, including the little windmill that popped up on David Cameron’s London roof whilst he was campaigning to become prime minister.

HARFORD: Wind power can be pretty effective. But you need a really, really big windmill in a really windy location to be efficient. These little windmills, especially in an urban environment, where you don’t get a consistent flow of wind — they generate an incredibly small amount of energy.

Cameron did win the election, in part because he pledged to build an “eco-friendly economy.” But his windmill was as much about sending a green signal as powering his toaster or even demonstrating his commitment to environmental issues.

A big part of conspicuous conservation is of course what the signals mean, and to discuss signalling theory we have Robin Hanson of George Mason University. This is a man who has argued on his blog against admirable activities. To him, they’re part of a self-interested arms race, and should be seen as such:

HANSON: Managing our appearance is actually a lot of what we humans do. Trying to understand, business, trying to understand jobs, school, even medicine — if you don’t understand people are trying to manage their image, you miss out on a lot of what’s going on.

You’ll also hear about the cars that Hanson and the Sextons drive, and we ask whether Toyota thought much about conspicuous consumption before the Sextons. South Park certainly did.

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  1. Rich Becker says:

    While I don’t disagree that image does have an allure. I think the ‘Green Rating’ was a poor metric for the paper. Most people have no idea what that is. They do understand miles per gallon.

    Prius is listed at 51
    Camry Hybrid is 33.

    No wonder Prius is more popular.

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  2. notkevinnealon says:

    A friend who is involved in the mansion building industry told of an Internet billionaire located in Las Vegas who drive a Prius, as did his wife. Interesting / disgusting part is that they were building a 20,000 sq foot mansion – in the desert no less. I have wondered what small fraction of the A/C bill they were making amends for.

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    • MikeD says:

      Not that I don’t think a 20,000 sqft mansion is ridiculous, you have to remember that heating and A/C required goes as the surface area of the building (i.e., where the hot/cold can actually get out into the atmosphere). The surface area of a building goes roughly as the square root of the size (nerds will wonder why I didn’t do cube root, that’s because the house size is measured in area instead of volume, so we already accounted for one of the dimensions) , so if you go from a 2,000 sqft house to a 20,000 sqft mansion, you’ve increased the size of the house 10x but you really only increased the surface area by 3. Again, I’m not saying that a 20,000 sqft house is “green”, but it’s not 10x as bad as you would normally assume.

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      • james says:

        Don’t forget the wine.

        A board member for a green non-profit spends $6000/month to chill his wine cellar. I doubt the 2000 sf house has one of those. . . And add in the heated pool, jacuzzi, etc

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  3. Fred says:

    Disclaimer: I’m a Prius Owner

    I did a lot of research before buying my car. The Honda Civic Hybrid is a very poor substitute. The MPG is different, the options are different, the hatchback and fold down back seat adds value for me, the consumer reports rating is better. Although the difference isn’t huge the Prius is a better value then the Honda Civic Hybrid in almost every way.

    Toyota did confuse the market by not allowing buyers to choose a Hybrid/non-Hybrid option so measuring consumers direct willingness to pay for the Hybrid technology it is not possible.

    I also wonder what percentage of solar panel owners choose to install their panels in a more visible and less efficient location? How many solar panel owners have already done insulation and other less visible changes first? How do solar panel owners in far less then optimal locations compare to folks paying their power company an increased rate for green energy (a closer equivalent of paying to install the panel on someone else’s roof). I feel like not enough research was put into how small the conspicuous market is as compared to the non-conspicuous distorting the listeners perception of reality. Power company green energy programs, high efficiency replacement windows/doors and insulation expenses in the US far dwarf the amount of badly placed solar panels and private jet flying Prius owners which are far more fun to talk about.

    I enjoy Freakonomics Radio but I’m pretty unimpressed with the research behind this episode.

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    • Heather says:

      Fred, those are also good points.

      I am a Prius owner and we found the Prius to be a better fit for us – roomier than the Civic, so with the space issue and the mpg, it wasn’t a difficult decision to make.

      We also have solar, and you are correct – there are a LOT of non-conspicuous changes that are generally made before the solar panels go on. The very first thing our solar installer did was ask what we could do to cut consumption. It’s cheaper to cut consumption than it is to put more panels on the roof. We made plenty of invisible changes – light bulbs were replaced with the energy-efficient ones, we replaced our old refrigerator with an energy-star one, and we covered all of our windows with solar screens.

      Those three changes cut our consumption by 33%. None of them are really visible to anyone in a way that screams “WE’RE GREEN!” The solar shades are pretty common in our neighborhood, so those aren’t all that noticeable.

      We did not have a place on the front of our house for the panels, and the back of our house faced the wrong direction. We ended up getting our patio extended and putting the solar on that. The extended covered patio played two roles – it gave us a place for the solar panels, but it also shields the living room and master bedroom from getting the worst of the sun in the summer.

      While there are certainly incidences of ‘conspicuous conservation’ out there, I’m sure there are lots of other people who are just being practical.

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      • James says:

        Those “invisible changes” are a big part of the reason I don’t have PV solar, and won’t until I can either buy an electric/plug-in hybrid that fits my needs, or the local power company starts paying for the excess power I’d generate. They’ve gotten my monthly electric bill down to under $50. With no loss – indeed, some improvement – in comfort, I might add.

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  4. Steve S. says:

    I really enjoyed this podcast! The concept of “competitive altruism” and the phrase “low hanging fruit” both seems relevant beyond this topic. Good work!

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  5. Joe B. says:

    I just listened to the podcast…very interesting as usual. I have an insight to offer regarding the Sextons’ research. Perhaps the paper they wrote delves into this, but I haven’t read it, so do forgive. The research revealed that some “green” neighborhoods actually have fewer Prius owners than expected. As an urban planner, I think I can offer an explanation of this anomaly. I suspect the role the neighborhood’s location plays on travel behavior may not have been accounted for. Gentrified, inner-city neighborhoods tend to be some of the “greenest,” depending on the metrics used. These neighborhoods offer residents a far greater degree of transportation alternatives, such as biking, transit, and walking. Many residents in these “green” neighborhoods may not NEED a car, and choose to display their conspicuous conservation by riding a bike. Another factor worth considering is that many of the young urban hipsters living in these neighborhoods could care less what image they are projecting (myself included). There’s my two cents…for what it’s worth.

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  6. Ed says:

    I commute by bike (not for the greenness of it, but overall convenience and economics of it), and every time I see a Prius drive by me on my commute, I hope they’re just a little bit jealous that I’m even greener than they are.

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  7. Andrew Lamontagne says:

    Firstly The Image of the Prius is based on interior space vs the aero co-efficient.
    The 2010 Prius gets a staggering .25 drag co-efficient.. the shape of the car is purely based around these wind tunnel tests. It is the only major manufactured HEV that’s purely built to offer a exceptional efficiency in a wind tunnel.

    The Prius in every spectrum of the car is working or developing a more efficient HEV. although HEV and EVs are not really efficient at the moment compared to their long battle with petrol running automobiles.
    Toyota Prius HEV system works completely different than its competitors.
    For example
    -the engine purely powers the battery
    -kinetic recovery systems
    -the chassis shape and size is developed by aero co-efficient and compartment room
    -least amount of rotational mass

    The main reason the Toyota Prius dominates the market is the fact that they were the first major manufacture to offer an HEV. The put more money into development in aero, mechanical, and electrical efficiency.

    The Toyota petrol engines, such as the engine found in the Prius, air to fuel ratio is on the rich side. why rich on fuel? a lean fuel mixture might give you better fuel economy but the engine will run at a hotter temperature thus creating higher wear rate on the engine. while a richer fuel mixture will give you a motor that will get a longer life span, due to engine temperatures.

    That being said their are many petrol running cars that get greater mpg equivalents compared to the prius. other cars with greater aero efficiency. others with less rotational mass. at the moment, the prius does its job the best all around for an HEV.

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  8. Soony says:

    Conspicuous conservation maybe for the wannabe rich hipsters, but those who are really rich, I suspect go green for the guilt-reducing factor. We rich people like to assuage our guilt for having so much money by giving to a cleaner environment.

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