On the relevance of life-cycle CO2 emissions for vehicle purchase decisions

Abstract

This paper examines individual preferences for a reduction of life-cycle CO2 emissions in vehicle purchase decisions. The empirical analysis is based on data from a stated choice experiment among citizens in Germany that refers to decisions between three types of electric vehicles and one conventional vehicle that are characterized by several attributes. With respect to CO2 emissions, we specifically examine emissions in vehicle production besides the commonly considered emissions in vehicle use. Our econometric analysis reveals a strong stated preference for the reduction of both components of life-cycle CO2 emissions. Furthermore, we find that conventional vehicles are significantly preferred over electric vehicles. Surprisingly, environmental attitudes, i.e. environmental awareness and ecological policy identification, have no significant effects on the reduction of CO2 emissions. Instead, citizens with a strong environmental identity rather tend to avoid the purchase of conventional vehicles. We discuss several practical policy implications.