Conspicuous conservation: The Prius halo and willingness to pay for environmental bona fides

This paper develops a theory of conspicuous conservation, a phenomenon related to conspicuous consumption in which individuals seek status through displays of austerity amid growing concern about environmental protection. We identify a statistically and economically significant conspicuous conservation effect in vehicle purchase decisions and estimate a mean willingness to pay for the green signal provided by the distinctively designed Toyota Prius in the range of $430-4200 depending upon the owner's location. Results are related to the growing literature on green markets and suggest that policy should target less conspicuous conservation investments that will be under-provided relative to those that confer a status benefit. (C) 2013 Elsevier Inc. All rights reserved.