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. Isabella Cota Schwarz says:

    “The problem is that environmental guilt, though it may well lead to conspicuous ecoproducts, does not seem to elicit conspicuous results… The positive effect of idealistic consumers does exist, but it is masked by the rising demand and numbers of other consumers.”

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  2. Kali says:

    When we first got our Prius and I saw the South Park episode about it, I wrote about the feeling of having to live up to the responsibility of being smug and perceived at “eco-conscious”. (http://evidentlyblog.blogspot.com/2006/11/feeling-smug-about-driving-hybrid.html) While the Prius may be conspicuous in flagging one as someone who cares about energy efficiency, it also flags you as someone who should be doing everything in their power to help solve the problem. And if not, then ‘the guilt’.

    I also want to say that our motivation to buy a new Prius in 2005 came from a desire to support the technology. Clearly hybrid technology is not perfect nor the endgame for motor vehicle propulsion but my husband and I wanted to vote with our $’s that this was something we wanted to see more of. But why did we pick the Prius above all others on the market at the time? Because it was the quickest and easiest way to signal our vote and our faith in alternative technologies.

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  3. Robert Homer says:

    This podcast seems to be a good example of economists naivete with respect to psychology. It is hardly a major insight that people value connectedness. And displaying a product which shows your values is a way to promote community among like minded people. That has obvious value to a social species like humans. Why else display symbols of sports teams?

    On the other hand, perhaps the real point of this podcast is to just to poke fun at the ecologically minded? Recognizing that some of whom may pursue that aim in less than ideal forms.

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  4. Mike G says:

    I looked at both the prius and civic a few years back and chose the prius over the civic. Not because it advertised my green-ness, but rather because it had a better gas mileage, larger trunk, better dealer financing,… the two cars are not good a comparison. I’ll have to read the article to figure out how the Sextons arrived at $1K for the value gained from “I’m green!” advertising the prius provides. I didn’t think the price difference between the two was more than $1-3K.

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  5. Scott Hemmons says:

    If a man does a good deed in a forest and no one is around to hear it, does it make a difference?

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  6. Heidi says:

    I hate to nitpick, but the term is wind turbine, not wind mill. What exactly do you imagine is being milled? My kids’ school put up a wind turbine in their yard (relatively small, not sure if it’s bigger than David Cameron’s or not) and while it does not generate enough electricity to power the school, it does contribute. Perhaps more importantly it is used, along with (conspicuously placed) solar panels to teach the students about alternative energy,. They learn how the wind turbine and the solar panels work and speculate on how they can be improved and more widely implemented. Conspicuous conservation? Perhaps, but not entirely for show.

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  7. Steve says:

    Hi – the ‘share Tweet ‘ is going to Error 404

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  8. Amnon Govrin says:

    Two words: Honda Insight.
    When the first Prius was on our streets (which looked like the most boring compact ever) there was Honda Insight, which didn’t look like anything out there including dubiously contributing wheel covers. It had better gas mileage than second generation and even third generation Prius. And it was also cheaper. But it had only two seats.
    So, very similar in “signaling”, better features except for only 2 seats. As much as I agree with your claim of Prius not having a “non-hybrid” model like all the other hybrids, the Insight doesn’t fit that mold and the original Prius doesn’t fit that model either as it had the design of a standard compact.
    Fast forward to last year, when the new Insight was introduced. It effectively looks like a slightly smaller Prius and doesn’t have a gas-only counterpart that would dilute the green image.
    Is the most sold Hybrid by Honda the new Insight (since introduction)? Are the Insight sales close to Prius? Was the old Insight a successful car?
    My point is that there is more to it and this podcast showed the data serving its point rather than other data that might not.
    I, for one, could care less about the green effect. I bought my Prius 2008 because it is cool and fun in a geeky kind of way and comes standard with the MPG video game also known as the 7 inch screen in the dashboard.

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