David Cameron did), or installing solar panels on the side of your house facing the street even if it doesn't get the most sun (it's hard to believe, but people actually do that).
In their paper, “Conspicuous Conservation: The Prius Effect and Willingness to Pay for Environmental Bona Fides,” the Sextons focus on the Prius. Why? Because unlike most hybrids, it is obviously one:
The Honda Civic hybrid looks like a regular Honda Civic. The Ford Escape hybrid looks like a Ford Escape. And so, our hypothesis is that if the Prius looked like a Toyota Camry or a Toyota Corolla that it wouldn’t be as popular as it is. And so what we set out to do in this paper is to test that empirically ("Hey Baby, Is That a Prius You’re Driving?").They were curious as to how much value that people who "lean green" place on being seen "leaning green?" They found that the Prius’s “green halo” effect was quite large. More specifically, the discovered that some people buy a Prius rather than another hybrid, not because it gets better performance (its performance is virtually identical to that of the Civic), but because when you buy one, everyone knows (because of its unique design) that you've bought a hybrid (and thus know that you're environmentally conscious). That's not the case when you by a Honda Civic hybrid; because it looks just like a regular Honda civic, unless you tell your neighbors that it's a hybrid, they may never know.
The Prius effect is even more pronounced in green neighborhoods (i.e., environmentally conscious communities). In other words, people are more likely to buy a Prius (as opposed to a Civic) when they live in neighborhoods where doing so is likely to garner their neighbor's approval (e.g., Berkeley, CA) than when they live in neighborhoods where doing so is not (e.g. Crawford, TX).
Smug Alert" episode.
Smug Alert" episode.
To be clear, the Sextons are not claiming that everybody buys "green" simply to show off how green they are. But, if everyone was only buying because they are green rather than showing others how green they are, then it is unlikely that there would be such a disparity between the purchase of Prius's and other hybrids. Nor would people be putting useless windmills on their roofs or installing solar panels on the shady sides of their houses that happen to face the street.
All of this is nicely summarized in a recent Freakonomics podcast. You can listen to it at the Freakonomics blog ("Hey Baby, Is That a Prius You’re Driving?"), download it from iTunes, get the RSS feed, or read the transcript.