Consumer purchases of energy-efficient cars: behavioural implications for policy

Ibon Galarraga, Josu Lucas and Steffen Kallbekken

No 2018-01, Working Papers from BC3

Abstract: Improved energy efficiency can help reduce pollution, contribute to energy security, and help consumers save money. This paper explores car purchasing behaviour in order to draw implications for designing policies that will increase the demand for energy-efficient cars. To that end we calculate own and cross price elasticities of demand for cars with efficiency labels in the Spanish car market. The results show that the elasticities depend on assumptions about how consumers decide what car to purchase. If consumers are concerned about the absolute energy performance of cars independently of other attributes, demand for more efficient cars is more elastic than demand for less efficient cars. If consumers choose the car segment first and then the energy performance, the opposite result is found. The results suggest that both relative and absolute labelling schemes can be useful, depending on how consumers make their decisions. It might also be possible to design a mixed system.

Keywords: energy efficiency; car segments; price elasticities of demand; labelling (search for similar items in EconPapers)
Date: 2018-04
References: Add references at CitEc
Citations:

Published

Downloads: (external link)
http://www.bc3research.org/index.php?option=com_wp ... 4&repec=1&Itemid=279 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden (http://www.bc3research.org/index.php?option=com_wpapers&task=downpubli&iddoc=94&repec=1&Itemid=279 [301 Moved Permanently]--> https://www.bc3research.org/index.php?option=com_wpapers&task=downpubli&iddoc=94&repec=1&Itemid=279)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bcc:wpaper:2018-01

Access Statistics for this paper

More papers in Working Papers from BC3
Bibliographic data for series maintained by Sergio Henrique Faria ().