IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this article

Consumer Learning and Hybrid Vehicle Adoption

Listed author(s):
  • Garth Heutel

    ()

  • Erich Muehlegger

    ()

We study the effect of differences in product quality on new technology diffusion. We propose a model in which heterogeneity in perceived product quality affects consumer adoption. If consumers experientially infer the quality of a technology, an increase in initial exposure to a low-quality product may inhibit subsequent diffusion. Incentives intended to speed up adoption may in fact have the opposite effect, if they propagate low-quality signals. We examine the predictions of the model using sales data for 11 hybrid-vehicle models between 2000 and 2006. Consistent with press reports that the first-generation Insight was perceived to be of lower quality than the first-generation Prius, we find that, conditional on overall hybrid vehicle adoption in the first 2 years, locations with a relatively high Prius market share experienced faster subsequent adoption than states with a relatively high Insight market share. We estimate the elasticity of new hybrid sales with respect to the Prius penetration rate is 0.30–0.58, while the elasticity with respect to the Insight penetration rate is $$-$$ - 0.14 to $$-$$ - 0.44. Copyright Springer Science+Business Media Dordrecht 2015

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://hdl.handle.net/10.1007/s10640-014-9819-3
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Springer & European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

Volume (Year): 62 (2015)
Issue (Month): 1 (September)
Pages: 125-161

as
in new window

Handle: RePEc:kap:enreec:v:62:y:2015:i:1:p:125-161
DOI: 10.1007/s10640-014-9819-3
Contact details of provider: Web page: http://www.springer.com

Postal:

c/o EAERE Secretariat - Fondazione Eni Enrico Mattei - Isola di San Giorgio Maggiore 8, I-30124 Venice, Italy

Phone: +39.041.2700438
Fax: +39.041.2700412
Web page: http://www.eaere.org/
Email:


More information through EDIRC

Order Information: Web: http://www.springer.com/economics/environmental/journal/10640/PS2

References listed on IDEAS
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.:

as
in new window


  1. Francois Lescaroux & Olivier Rech, 2008. "The Impact of Automobile Diffusion on the Income Elasticity of Motor Fuel Demand," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 41-60.
  2. Nancy L. Rose & Paul L. Joskow, 1990. "The Diffusion of New Technologies: Evidence from the Electric Utility Industry," RAND Journal of Economics, The RAND Corporation, vol. 21(3), pages 354-373, Autumn.
  3. de Haan, Peter & Mueller, Michel G. & Peters, Anja, 2006. "Does the hybrid Toyota Prius lead to rebound effects? Analysis of size and number of cars previously owned by Swiss Prius buyers," Ecological Economics, Elsevier, vol. 58(3), pages 592-605, June.
  4. Greenman, J. V., 1996. "The car park: Diffusion models revisited," Energy Economics, Elsevier, vol. 18(1-2), pages 107-128, April.
  5. Geroski, P. A., 2000. "Models of technology diffusion," Research Policy, Elsevier, vol. 29(4-5), pages 603-625, April.
  6. Kloess, Maximilian & Müller, Andreas, 2011. "Simulating the impact of policy, energy prices and technological progress on the passenger car fleet in Austria--A model based analysis 2010-2050," Energy Policy, Elsevier, vol. 39(9), pages 5045-5062, September.
  7. Yaniv Dover & Jacob Goldenberg & Daniel Shapira, 2012. "Network Traces on Penetration: Uncovering Degree Distribution from Adoption Data," Marketing Science, INFORMS, vol. 31(4), pages 689-712, July.
  8. Stoneman, Paul & Kwon, Myung-Joong, 1994. "The Diffusion of Multiple Process Technologies," Economic Journal, Royal Economic Society, vol. 104(423), pages 420-431, March.
  9. Paul Heidhues & Nicolas Melissas, 2006. "Equilibria in a dynamic global game: the role of cohort effects," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 28(3), pages 531-557, 08.
  10. Dieter Helm, 2010. "Government failure, rent-seeking, and capture: the design of climate change policy," Oxford Review of Economic Policy, Oxford University Press, vol. 26(2), pages 182-196, Summer.
  11. Karen A. Kopecky & Richard M. H. Suen, 2010. "A Quantitative Analysis Of Suburbanization And The Diffusion Of The Automobile," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 51(4), pages 1003-1037, November.
  12. Arie Beresteanu & Shanjun Li, 2011. "Gasoline Prices, Government Support, And The Demand For Hybrid Vehicles In The United States," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 52(1), pages 161-182, 02.
  13. Gallagher, Kelly Sims & Muehlegger, Erich, 2011. "Giving green to get green? Incentives and consumer adoption of hybrid vehicle technology," Journal of Environmental Economics and Management, Elsevier, vol. 61(1), pages 1-15, January.
  14. Colombo, Massimo G & Mosconi, Rocco, 1995. "Complementarity and Cumulative Learning Effects in the Early Diffusion of Multiple Technologies," Journal of Industrial Economics, Wiley Blackwell, vol. 43(1), pages 13-48, March.
  15. Jay Pil Choi, 1997. "Herd Behavior, the 'Penguin Effect,' and the Suppression of Informational Diffusion: An Analysis of Informational Externalities and Payoff Interdependency," RAND Journal of Economics, The RAND Corporation, vol. 28(3), pages 407-425, Autumn.
  16. Bryan Bollinger & Kenneth Gillingham, 2012. "Peer Effects in the Diffusion of Solar Photovoltaic Panels," Marketing Science, INFORMS, vol. 31(6), pages 900-912, November.
  17. Charles F. Manski, 2000. "Economic Analysis of Social Interactions," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 115-136, Summer.
  18. Kahn, Matthew E., 2007. "Do greens drive Hummers or hybrids? Environmental ideology as a determinant of consumer choice," Journal of Environmental Economics and Management, Elsevier, vol. 54(2), pages 129-145, September.
  19. James M. Sallee, 2011. "The Surprising Incidence of Tax Credits for the Toyota Prius," American Economic Journal: Economic Policy, American Economic Association, vol. 3(2), pages 189-219, May.
  20. Chandra, Ambarish & Gulati, Sumeet & Kandlikar, Milind, 2010. "Green drivers or free riders? An analysis of tax rebates for hybrid vehicles," Journal of Environmental Economics and Management, Elsevier, vol. 60(2), pages 78-93, September.
  21. Michael Kremer & Edward Miguel, 2007. "The Illusion of Sustainability," The Quarterly Journal of Economics, Oxford University Press, vol. 122(3), pages 1007-1065.
  22. Kenneth B. Medlock & Ronald Soligo, 2002. "Car Ownership and Economic Development with Forecasts to the Year 2015," Journal of Transport Economics and Policy, University of Bath, vol. 36(2), pages 163-188, May.
  23. Goolsbee, Austan & Klenow, Peter J, 2002. "Evidence on Learning and Network Externalities in the Diffusion of Home Computers," Journal of Law and Economics, University of Chicago Press, vol. 45(2), pages 317-343, October.
  24. Iimi, Atsushi, 2005. "Estimating demand for cellular phone services in Japan," Telecommunications Policy, Elsevier, vol. 29(1), pages 3-23, February.
  25. Axsen, Jonn & Mountain, Dean C. & Jaccard, Mark, 2009. "Combining stated and revealed choice research to simulate the neighbor effect: The case of hybrid-electric vehicles," Institute of Transportation Studies, Working Paper Series qt02n9j6cv, Institute of Transportation Studies, UC Davis.
  26. Paul Stoneman & Otto Toivanen, 1997. "The Diffusion Of Multiple Technologies: An Empirical Study," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 5(1), pages 1-17.
  27. Robert W. Fri, 2003. "The Role of Knowledge: Technological Innovation in the Energy System," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 51-74.
  28. Mau, Paulus & Eyzaguirre, Jimena & Jaccard, Mark & Collins-Dodd, Colleen & Tiedemann, Kenneth, 2008. "The 'neighbor effect': Simulating dynamics in consumer preferences for new vehicle technologies," Ecological Economics, Elsevier, vol. 68(1-2), pages 504-516, December.
  29. Kahn Matthew E & Vaughn Ryan K., 2009. "Green Market Geography: The Spatial Clustering of Hybrid Vehicles and LEED Registered Buildings," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 9(2), pages 1-24, March.
  30. Jensen, Richard, 1983. "Innovation adoption and diffusion when there are competing innovations," Journal of Economic Theory, Elsevier, vol. 29(1), pages 161-171, February.
  31. McFarland, James R. & Herzog, Howard J., 2006. "Incorporating carbon capture and storage technologies in integrated assessment models," Energy Economics, Elsevier, vol. 28(5-6), pages 632-652, November.
  32. Andonova, Veneta, 2006. "Mobile phones, the Internet and the institutional environment," Telecommunications Policy, Elsevier, vol. 30(1), pages 29-45, February.
  33. H. Peyton Young, 2009. "Innovation Diffusion in Heterogeneous Populations: Contagion, Social Influence, and Social Learning," American Economic Review, American Economic Association, vol. 99(5), pages 1899-1924, December.
  34. Axsen, Jonn & Mountain, Dean C. & Jaccard, Mark, 2009. "Combining stated and revealed choice research to simulate the neighbor effect: The case of hybrid-electric vehicles," Resource and Energy Economics, Elsevier, vol. 31(3), pages 221-238, August.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:kap:enreec:v:62:y:2015:i:1:p:125-161. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)

or (Rebekah McClure)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.