TY - JOUR
T1 - Effects of providing total cost of ownership information on consumers' intent to purchase a hybrid or plug-in electric vehicle
AU - Dumortier, Jerome
AU - Siddiki, Saba
AU - Carley, Sanya
AU - Cisney, Joshua
AU - Krause, Rachel M.
AU - Lane, Bradley W.
AU - Rupp, John A.
AU - Graham, John D.
N1 - Publisher Copyright:
© 2015 Elsevier Ltd.
PY - 2015/2/1
Y1 - 2015/2/1
N2 - Energy-saving technologies have a difficult time being widely accepted in the marketplace when they have a high initial purchase price and deferred financial benefits. Consumers might not realize that, in the long-run, the financial benefits from reduced energy consumption offset much or all of the initial price premium. One strategy to address consumer misconception of this advantage is to supply information on the "total cost of ownership", a metric which accounts for the purchase price, the cost of the fuel, and other costs over the ownership period. In this article, we investigate how providing information on five-year fuel cost savings and total cost of ownership affects the stated preferences of consumers to purchase a gasoline, conventional hybrid, plug-in hybrid, or battery electric vehicle. Through an online survey with an embedded experimental design using distinct labels, we find that respondent rankings of vehicles are unaffected by information on five-year fuel cost savings. However, adding information about total cost of ownership increases the probability that small/mid-sized car consumers express a preference to acquire a conventional hybrid, plug-in hybrid, or a battery-electric vehicle. No such effect is found for consumers of small sport utility vehicles. Our results are consistent with other findings in the behavioral economics literature and suggest that further evaluation of the effects of providing consumers with information on the total cost of vehicle ownership is warranted.
AB - Energy-saving technologies have a difficult time being widely accepted in the marketplace when they have a high initial purchase price and deferred financial benefits. Consumers might not realize that, in the long-run, the financial benefits from reduced energy consumption offset much or all of the initial price premium. One strategy to address consumer misconception of this advantage is to supply information on the "total cost of ownership", a metric which accounts for the purchase price, the cost of the fuel, and other costs over the ownership period. In this article, we investigate how providing information on five-year fuel cost savings and total cost of ownership affects the stated preferences of consumers to purchase a gasoline, conventional hybrid, plug-in hybrid, or battery electric vehicle. Through an online survey with an embedded experimental design using distinct labels, we find that respondent rankings of vehicles are unaffected by information on five-year fuel cost savings. However, adding information about total cost of ownership increases the probability that small/mid-sized car consumers express a preference to acquire a conventional hybrid, plug-in hybrid, or a battery-electric vehicle. No such effect is found for consumers of small sport utility vehicles. Our results are consistent with other findings in the behavioral economics literature and suggest that further evaluation of the effects of providing consumers with information on the total cost of vehicle ownership is warranted.
KW - Battery electric vehicles
KW - Label information
KW - Life cycle cost
KW - Rank-ordered logit
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U2 - 10.1016/j.tra.2014.12.005
DO - 10.1016/j.tra.2014.12.005
M3 - Article
AN - SCOPUS:84921058820
SN - 0965-8564
VL - 72
SP - 71
EP - 86
JO - Transportation Research Part A: Policy and Practice
JF - Transportation Research Part A: Policy and Practice
ER -