Experimental evidence for the effects of emissions charges and efficiency information on consumer car choices

A consumer purchasing a car can benefit the environment by choosing a vehicle with lower emissions and higher fuel efficiency. In addition to emissions of CO2, Nitrogen oxide (NOx) emissions have serious implications for the environment and public health. Working with a national environmental protection agency, we conducted a consumer choice experiment with a representative sample (N = 95) of consumers. We tested whether choices were altered by (i) the introduction and presentation of a NOx tax and (ii) the presentation of fuel efficiency information. The results show that a NOx tax has the potential to shift consumer choices towards lower NOx-emitting vehicles, particularly if the tax is made salient. We extend previous research on partitioned prices by finding an effect of partitioning environmental taxes, although the largest impact on choices occurred when the amount of pollutant was made explicit. Consumers were more likely to choose fuel-efficient cars when running costs were communicated as travel units per fixed cost of fuel than as cost of fuel per fixed unit of travel, though a manipulation of unit size had no effect. Overall, these findings imply that financial incentives and subtle presentational changes can alter consumer choices, with the potential to promote sustainable consumption.