FACTORS INFLUENCE NEW BUYERS TO BUY GASOLINE-POWERED VEHICLES OR AN HEV

What factors influence new buyers to buy gasoline-powered vehicles or an HEV?

Abstract

Understanding consumer behaviour is essential in designing policies that efficiently increase the uptake of clean technologies over the long-run. Expert opinion or qualitative market analyses have tended to be the sources of this information. However, greater scrutiny on governments increasingly demands the use of reliable and credible evidence to support policy decisions. While discrete choice research and modeling techniques have been applied to estimate consumer preferences for technologies, these methods often assume static preferences. This study evaluates the consumer behaviour in buying HEV's. We estimate preferences for new vehicle technologies under different market assumptions, using responses from two national surveys focused on hybrid gas-electric vehicles and HEV's. The results support the relevance of a range of vehicle attributes beyond the purchase price in shaping consumer preferences towards clean vehicle technologies. They also corroborate our hypothesis that the degree of market penetration of clean vehicle technologies is an influence on people's preferences.

Table of Content

Chapter 1: Introduction5

Background of the Study5

Purpose of the Study6

Contribution of the Thesis7

Significance of the Research7

Scope of the Research8

Chapter 2: Literature Review11

Alternative Fuels11

Why Hybrid Electric Vehicles?12

Barriers to Hybrid Electric Vehicles13

Confusing Technology and Lack of Information16

Marketing16

An approach to understanding symbols17

Traditional models for technological change20

Consumer Behavior24

Incomplete information and imperfect experience30

The iterative choice process31

Compensatory and non-compensatory choice strategies32

Chapter 3: Methodology34

Rationale of the Methods34

Instrument35

Participants37

Reliability and Validity38

Ethical Issues40

Confidentiality42

Data Analysis42

Assumptions & Limitation43

Chapter 4: Results and Findings44

Demographic Results44

Hypothesis Testing53

Chapter 5: Conclusion61

Reduce support for oil producers63

Recommendation64

Why would anyone buy a hybrid electric vehicle? An answer65

References79

Chapter 1: Introduction

Background of the Study

Consumer interest in Hybrid Electric Vehicles (HEVs) has risen steadily in recent years in response to rising fuel costs and increased concern about pollution and greenhouse gas emissions. Hybrid vehicles utilize the same gasoline fuel infrastructure as conventional Internal Combustion Engine (ICE) vehicles, yet represent a distinct technology improvement that can provide greater fuel economy and reduced emissions for equivalent vehicle performance. HEVs face the same barriers to diffusion as any new cost-saving technologies, such as high initial unit costs, lack of knowledge by potential adopters, high discount rates for future cost savings and low consumer risk tolerance (Jaffe and Stavins 1994; Stoneman and Diederen 1994; Argote and Epple 1990). As an energy efficiency technology, HEVs also address positive externalities associated with resource management, the environment and energy security, which are not taken into account by the market (Jaffe and Stavins 1994). The presence of these externalities presents an economic argument for potential government intervention, yet it leaves open the question of the most efficient and effective avenue(s) for government action. Federal, State and Local Governments have offered tax deductions, credits, fee reductions and HOV lane privileges to HEV owners (State and Federal Incentives and Laws 2007).

Despite the proliferation of these incentive programs, it is still unclear how effective they actually are in promoting hybrid vehicle demand compared to other economic and social factors. As hybrid sales increase, it is important for policymakers to understand these relationships in ...