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.