The unique body shape of the Toyota Prius

Educated elites often show distaste for the sort of conspicuous consumption exemplified by McMansions, but it seems almost everyone likes to show off, even greenies.

Two US researchers, Steven Sexton and Alison Sexton (they’re twins), have coined the term “conspicuous conservation” to describe people who spend up big to signal their green status. The standard conventions of conspicuous consumption still apply – like German cars and appliances – but now esteem can also be bought through demonstrations of austerity.

The authors set out the issue in this paper, Conspicuous Conservation: The Prius Effect and Willingness to Pay for Environmental Bona Fides:

Amid heightened concern about environmental damage and global climate change, costly private contributions to environmental protection increasingly confer status once afforded only through ostentatious displays of wastefulness. Consumers may, therefore, undertake costly actions in order to signal their type as environmentally friendly or “green.” The status conferred upon demonstration of environmental friendliness is sufficiently prized that homeowners are known to install solar panels on the shaded sides of houses so that their costly investments are visible from the street.

They examine the sorts of people who buy hybrid cars in Washington (State) and Colorado, focussing on areas with a green demographic where sales of hybrid cars are high and where ‘signalling’ green credentials therefore ought to work. They attempt to isolate the “green halo” effect by comparing sales of the market-leading Toyota Prius – which has a distinctive and unique body shape – against those of comparable hybrids like the Honda Civic. Like all of the other 23 hybrid models on the US market (excepting the Prius), the Civic is virtually indistinguishable from the bigger-selling petrol powered variants of the same car. It is only identified by a small badge and hence, unlike the Prius, fails to signal its environmental credentials.

Anyone who’s watched Larry David tootling around LA in his Prius with uncurbed enthusiasm will get the picture – “we’re Prius drivers….we’re a special breed”. As Dan Becker, the head of the global warming program at the Sierra Club says, “the Prius allowed you to make a green statement with a car for the first time ever”.

The authors cite a market research company’s finding that 57% of Prius buyers say their main reason for choosing the Prius is because “it makes a statement about me”. They refer to another study where most of the individuals interviewed had only a basic understanding of environmental issues or the ecological benefits of hybrid cars but purchased “a symbol they could incorporate into a narrative of who they are or who they wish to be”.

The authors conclude that the conspicuous conservation effect accounts on average for 33% of the Prius’s market share in Colorado and 10% in Washington. No wonder it’s come to be known as the Toyota Pious.

This signalling effect is not a bad thing. As I’ve pointed out before, status-seeking is part of being human. While conspicuous consumption is associated with wastefulness – bling – conspicuous conservation may improve social welfare. To some extent, the writers argue, private actions can substitute for government policies and thereby yield social-welfare-improving environmental outcomes in the presence of market failures that under-value environmental amenities. In other words, it’s better to be an environmentally responsible wanker than a garden variety wanker.

The risk however is the desire to be ostentatious might crowd-out more efficient actions. For example, the authors caution that home owners might be prone to “over-invest in solar panels and under-invest in other green home improvements, like additional insulation and window caulking, because the former are conspicuous and the latter are not”. We already have ample evidence that government’s are vulnerable to glamorous incentives e.g. the ludicrously high solar feed-in tariffs offered by the former NSW Government. There’s also the possibility of the rebound effect, where owners of more efficient cars feel they have licence to drive more kilometres, thereby undermining the social benefits of their vehicle choice.

The authors suggest that subsidies for improved environmental outcomes should be targeted to concealed or inconspicuous conservation measures, such as home insulation, energy-efficient heating and cooling, and window stripping. They also suggest that subsidies for conspicuous measures might eventually undermine their value as status signals, in effect killing the golden goose.

Perhaps there’s scope to use signalling theory to actually extract money from green households. By way of example, my household has voluntarily paid a premium for green power for some years. Apart from the esteem I’ve now gained by mentioning it here, this has always been our “hidden secret”. If however the power companies were to devise a way to make such altruism visible – to make it competitive altruism – they might be able to get more of my neighbours and friends to pay this premium.

Maybe a prominent green-coloured band on the overhead power wires leading into the houses of green power users would be a suitable nudge. That’s only going to work in older areas where power isn’t underground and it won’t work for apartments, but there could still be a big market. Maybe VicRoads could sell a special green number plate for super fuel-efficient cars so that drivers of otherwise inconspicuous hybrid Honda Civics and Toyota Camrys could advertise their worthiness.

As I said, I don’t have any issue with people displaying their green credentials publicly. It’s human nature and my hunch is most green-oriented people do it (but I have another hunch they don’t like to own up to it). They’re not wankers. I do think it’s a bit rich however if those same people condemn suburbanites for vulgar status-seeking in the manner that this writer does. There might be a case for condemning McMansions for their environmental performance, but it seems hypocritical to condemn them for advertising status.

I’m not surprised that Honda in Australia reckons its research shows hybrid Civic buyers don’t necessarily want their car to say “look at me, I’m an environmentalist”. That’s presumably one reason why they bought the Civic. Fact is though, Prius sales slaughter the Civic hybrid’s.