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Car buyers and fuel economy?

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  • Turrentine, Tom
  • Kurani, Kenneth S
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    Abstract

    This research is designed to help researchers and policy makers ground their work in the reality of how US consumers are thinking and behaving with respect to automotive fuel economy. Our data are from semi-structured interviews with 57 households across nine lifestyle "sectors." We found no household that analyzed their fuel costs in a systematic way in their automobile or gasoline purchases. Almost none of these households track gasoline costs over time or consider them explicitly in household budgets. These households may know the cost of their last tank of gasoline and the unit price of gasoline on that day, but this accurate information is rapidly forgotten and replaced by typical information. One effect of this lack of knowledge and information is that when consumers buy a vehicle, they do not have the basic building blocks of knowledge assumed by the model of economically rational decision-making, and they make large errors estimating gasoline costs and savings over time. Moreover, we find that consumer value for fuel economy is not only about private cost savings. Fuel economy can be a symbolic value as well, for example among drivers who view resource conservation or thrift as important values to communicate. Consumers also assign non-monetary meaning to fuel prices, for example seeing rising prices as evidence of conspiracy. This research suggests that consumer responses to fuel economy technology and changes in fuel prices are more complex than economic assumptions suggest. The US Department of Energy and the Energy Foundation supported this research. The authors are solely responsible for the content and conclusions presented.

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    File URL: http://www.escholarship.org/uc/item/56x845v4.pdf;origin=repeccitec
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    Bibliographic Info

    Paper provided by Institute of Transportation Studies, UC Davis in its series Institute of Transportation Studies, Working Paper Series with number qt56x845v4.

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    Date of creation: 01 Feb 2007
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    Handle: RePEc:cdl:itsdav:qt56x845v4

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    Related research

    Keywords: UCD-ITS-RP-07-02; Social and Behavioral Sciences;

    References

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    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    1. Kurani, Kenneth S. & Turrentine, Tom & Sperling, Daniel, 1994. "Demand for Electric Vehicles in Hybrid Households: An Exploratory Analysis," University of California Transportation Center, Working Papers qt1c29r4hr, University of California Transportation Center.
    2. Calfee, John E., 1985. "Estimating the demand for electric automobiles using fully disaggregated probabilistic choice analysis," Transportation Research Part B: Methodological, Elsevier, vol. 19(4), pages 287-301, August.
    3. John M. Yun, 2002. "Offsetting Behavior Effects of the Corporate Average Fuel Economy Standards," Economic Inquiry, Western Economic Association International, vol. 40(2), pages 260-270, April.
    4. Nair, Santosh & Espey, Molly, 2004. "Automobile Fuel Economy: What is it Worth?," 2004 Annual meeting, August 1-4, Denver, CO 20102, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Kurani, Kenneth S & Turrentine, Tom & Sperling, Daniel, 1994. "Demand for electric vehicles in hybrid households: an exploratory analysis," Transport Policy, Elsevier, vol. 1(4), pages 244-256, October.
    6. Greene, David L., 1983. "A note on implicit consumer discounting of automobile fuel economy: Reviewing the available evidence," Transportation Research Part B: Methodological, Elsevier, vol. 17(6), pages 491-499, December.
    7. Pitts, Robert E & Willenborg, John F & Sherrell, Daniel L, 1981. " Consumer Adaptation to Gasoline Price Increases," Journal of Consumer Research, University of Chicago Press, vol. 8(3), pages 322-30, December.
    8. Puller, Steven L. & Greening, Lorna A., 1999. "Household adjustment to gasoline price change: an analysis using 9 years of US survey data," Energy Economics, Elsevier, vol. 21(1), pages 37-52, February.
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