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

Author

Listed:
  • Alex Coad

    () (Max Planck Institute of Economics, Evolutionary Economics Group)

  • Peter de Haan

    () (ETH Zurich, Institute for Environmental Decisions)

  • Julia Sophie Woersdorfer

    () (Max Planck Institute of Economics, Evolutionary Economics Group)

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.

Suggested Citation

  • Alex Coad & Peter de Haan & Julia Sophie Woersdorfer, 2008. "Consumer support for environmental policies: An application to purchases of green cars," Jena Economic Research Papers 2008-035, Friedrich-Schiller-University Jena.
  • Handle: RePEc:jrp:jrpwrp:2008-035
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Environmental policy; Technology adoption; Technology diffusion; Intrinsic motivation; Financial incentives.;

    JEL classification:

    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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