Bigger households with relatively older people living in their own home are more likely to buy an electric or hybrid car than a standard petrol or diesel car, according to new research by Doina Radulescu and Patrick Bigler. Perhaps surprisingly, their study does not find a significant effect of income or wealth on the probability of adopting the new technology. Nevertheless, prices significantly influence households’ decisions about buying a certain type of vehicle. So too do ‘green preferences’.
The researchers note that the private transport sector still accounts for a large share of worldwide CO2 emissions. Despite generous subsidy programmes and ambitious policy goals, the adoption rate of electric (EV) and hybrid (HV) vehicles remains low. In order to achieve global emission reduction goals and to make road transport more energy efficient and environmentally friendly a significant increase in EV adoption is necessary.
Based on an extensive dataset of new car registrations and their characteristics combined with socio-demographic information on households in the Swiss canton of Bern, the new study analyses which households typically buy electric or hybrid vehicles.
The authors estimate that the probability of buying an EV is by almost 50% more affected by its own price than by the price of other fuel type vehicles. This suggests that a policy to promote EV adoption is more successful if it decreases the price of EVs instead of increasing the prices of gasoline or diesel driven cars for example through fuel economy standards.
Furthermore, the study finds evidence for what the authors call ‘green preferences’. Some households have a higher valuation of environmentally friendly behaviour and those actions are generally correlated with each other.
The study approximates green preferences with a household’s decision about a specific electricity mix, a heating resource or the ownership of solar panels, and find evidence for green preferences leading to a higher uptake of EVs. For example, a household that owns a solar panel is 11 percentage points more likely to buy an EV than a household without one.
Doina Radulescu, University of Bern, +41 31 631 40 07, doina.radulescu@kpm.unibe.ch
Patrick Bigler, University of Bern, +41 31 631 53 20, patrick.bigler@kpm.unibe.ch