Consumer support for environmental policies: An application to purchases of green cars

Alex Coad (), Peter de Haan () and Julia Sophie Woersdorfer ()
Additional contact information
Peter de Haan: ETH Zurich, Institute for Environmental Decisions, Postal: CHN J73.2, Universitaetstr. 22, 8092 Zürich, Switzerland
Julia Sophie Woersdorfer: Max Planck Institute of Economics, Evolutionary Economics Group, Postal: Kahlaische Str. 10, D-07745 Jena, Germany

No 2008-035, Jena Economic Research Papers in Economics from Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics, Thueringer Universitaets- und Landesbibliothek

Abstract: This paper focuses on how consumer motivation can be tapped in order to encourage the adoption of cleaner technologies. Consumers are heterogeneous they may be guided by intrinsic motivation or extrinsic motivation. While information provision policies (such as the energy label for cars) may be effective in encouraging certain consumers to adopt green cars, financial incentive schemes (such as subsidies or fines) may be more persuasive for extrinsically-motivated consumers. We develop a dynamic theory of adoption of environmental innovations, in which information-provision policies are followed by financial incentives (first 'carrot', then 'stick' incentives). Analysis of a survey dataset of Swiss households observes considerable heterogeneity in terms of support of information- provision or financial incentive policies, in line with our conjectures. Our results will be of particular interest to policymakers interested in guiding consumers towards cleaner technologies.

Keywords: Environmental policy; Technology adoption; Technology diffusion; Intrinsic motivation; Financial incentives. (search for similar items in EconPapers)
JEL-codes: Q53 Q57 O33 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene, nep-env and nep-mkt
Date: 2008-05-06

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Journal Article: Consumer support for environmental policies: An application to purchases of green cars (2009)
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Persistent link: http://EconPapers.repec.org/RePEc:jrp:jrpwrp:2008-035

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