2011-2016

Aim of the project

The aim of the project was to analyse the determinants of eco car diffusion in the Swedish population. The main hypothesis put forward was that the decision to purchase an eco car depends not only on monetary incentives, such as prices, taxes and subsidies, but also on social influences from interaction within different social domains, and potentially on the interaction between public policy and social influence.

Project results

In one of our studies we compared the development in the consumer adoption of alternative fuel vehicles (AFVs; specifically ethanol cars) in the three largest cities of Sweden following the introduction of the Stockholm congestion tax in 2006. Our results suggested that the congestion tax had a significant impact on ethanol car purchases in both 2006 and 2007, but this positive effect faded away over time. The most important reason for choosing an ethanol car is previous experience of ethanol car ownership. The results also showed that highly educated people are more prone to choose ethanol cars. In regard to the Stockholm congestion tax, the exemption of the congestion charge was associated with an increase in the conditional probability to purchase an ethanol car. The 1.2 percentage point increase may seem small, but in the light of the fact that the probability of buying an ethanol car without the congestion tax amounted to 3.3 per cent the relative effect is considerable. If the aim of the congestion tax is to steer the car fleet towards more AFVs, our results indicate that the exempt should be reintroduced. Moreover, we may conclude that car owners appear to take influence of economic incentives. Policies that aim at affecting operating costs by the increase of taxes and charges (e.g. carbon tax) not only seem to influence how the car is used but also which car people choose to buy.

In another study we focused on the interpersonal influence on AFV adoption of three social domains (neighbours, family and co-workers). The results showed that the interpersonal influence from neighbours was correlated to AFV adoption, whereas the links between AFV adoption and the spheres of the family and the co-workers, respectively, were weaker. The research relates to the discussion on weak and strong ties and the level of perceived interpersonal influence. Since ties to neighbours in general can be assumed to be weaker than with family and co-workers the results indicate that weaker social ties may be more important for innovation diffusion. It turns out that as the adaption of innovation picks up, and thus becomes more common and visible to people in the neighbourhood, the perceived non-monetary value of this innovation increases and the rate of adoption continues to grow. When the AFV turns to normal, preferences change and the product or the utility derived from the product also becomes more attractive to big numbers of people.

The main result presented above is in line with ongoing research, which attempts to take endogeneity and self-selection into account. The link between social domains and AFV adoption may potentially be of two types: the domains have an influence on AFV adoption because of social interaction and learning, or the domains have an influence on AFV adoption because there is a clustering into the domains of people with similar preferences and attitudes. In order to shed more light on this problem, we adjusted for previous migration flows and thereby reducing the risk of reverse causality. Preliminary results indicate that the neighbourhood is the most important social domain for AFV adoption even though the marginal effects are rather small. All in all, it seems like the innovation diffusion process of AFVs is a spatial process where adoption is more likely to happen in the vicinity of existing adoptions.

In a third study some institutional aspects were touched upon. Although Sweden adopted a carbon tax both on fuel and vehicle ownership in 1993 and 2006, the national tax deduction for commuting expenses is still in 2016 without any direct incitement to choose a car with less emission. The arguments for decreasing or abolishing the tax deduction have been many and the arguments for the tax deduction have been few but apparently very legitimate and strong; labour market mobility, regional expansion, and growth. Increases in the tax deduction have been made explicitly to compensate for higher gasoline prices as an effect of higher carbon dioxide taxes. It has been indicated that it may be difficult to abolish policy instruments that subsidizes transportation, since people have already based their decisions where to live and work on the basis of previous policies. The tax deduction, in other words, contributes to lock the society into a structural transport dependency.

New research questions

During data analysis of AFV adoption regarding the choice of gas, diesel and ethanol cars, we learned that individuals having higher education within environmental-related fields (environmental protection, biology etc.) were clearly correlated with choosing fossil fuel engines. One would expect knowledgeable experts to see the apparent benefits of choosing fuels that reduce fossil CO2 emissions. On the other hand, it may be assumed that it is difficult to practise what you preach, or that they can see beyond seemingly simple causal relationships. However, our dataset was too small to draw any conclusions, but it would be interesting to investigate this issue on the basis of a broader set of consumer products and using a combination of register data, surveys and interviews.

In our studies AFVs were defined as ethanol cars, which currently appears to be out of line since sales of ethanol cars recently has dropped significantly. Today it seems more pertinent to look closer at various hybrid cars, electric cars, hydrogen cars etc. Is it the case that this new wave of environmentally friendly cars shows different patterns of diffusion and adoption?

International connections

Research exchange
Andrea Mannberg visited University of Wyoming, Laramie during spring 2013; Johan Jansson was invited lecturer at African Climate Development Initiative, University of Cape Town during September 2015.

Conferences
Paper: Do tax incentives affect green car adoption? - A longitudinal study of the Stockholm congestion tax.
* Proceedings of 20th Ulvön Conference on Environmental Economics, Ulvön, 2013.
* Proceedings of The Fiscal State and Social Citizenship II, Vadstena, 2014.
* Presented at the National Conference in Economics, Umeå, 2014.

Paper: A History of Policy Conflicts. The Greening of the Swedish Car Fleet since the 1990s.
* Paper presented at the Nordiska ekonomisk-historiska mötet, Umeå University, 2015.

Paper: Comparing car buyers of bio and fossil fuel cars: Effects of social domains and sociodemographics.
* Accepted for the 3rd Nordic Conference on Consumer Research, Vasa, 2014.
* Presented at UiT the Arctic University of Norway, Tromsö, 2015.
* Presented at the Center for Transport Research, Stockholm, 2015.
* Proceedings of The Southern African Institute of Management Scientists Conference, Cape Town, 2015.
* Presented at The Economic Policy Seminar, Umeå, 2015.
* Presented at Luleå Tekniska Universitet, Luleå, 2015.

The third task

In a paper published in Ekonomisk Debatt (43:1, 2015) the Stockholm congestion tax was discussed. We received several comments and questions from interested readers.

The two most important publications

Mannberg et al. (2014): Do tax incentives affect households' adoption of 'green' cars? Here we compared the development in the consumer adaption of alternative fuel vehicles in the three largest cities of Sweden following the introduction of the Stockholm congestion tax in 2006. We were able to estimate the effect of the congestion tax on car purchasing behaviour since ethanol cars were exempt from the congestion tax between 2006 and 2009. This provided a natural experiment for testing the effectiveness of economic incentives on the purchasing of AFVs. The two other metropolitan cities were used to create a counterfactual course of events.

Jansson et al (submitted): Adoption of alternative fuel vehicles. In this study we focused on the interpersonal influence on AFV adoption of three social domains. Based on the literature on innovation diffusion, strong and weak ties, and AFV adoption we explored how membership in these three social domains is related to AFV adoption.

Publication strategy

Our publication strategy is to publish four articles in international journals. So far we have published one paper (Energy Policy) and another one is under review. Currently we are preparing two manuscripts for submission. All papers will be published in open access journals.

Publication list (chronological order)

Mannberg, A., Jansson, J., Pettersson, T., Brännlund, R. & Lindgren, U. (2014): Do tax incentives affect households' adoption of 'green' cars? A panel study of the Stockholm congestion tax. Energy Policy, 74, 286-299.

Mannberg, A., Brännlund, R., Jansson, J., Lindgren, U. & Pettersson, T. (2015): Ekonomisk Debatt, 43:1, 32-39.

Rezvani, Z., Jansson, J. & Bodin, J. (2015): Advances in consumer electric vehicle adoption research: A review and research agenda. Transportation Research part D, 34, 122-136.

Jansson, J., Lindgren, U., Pettersson, T., Mannberg, A. & Brännlund, R. (submitted): Investigating the effects of interpersonal influence from neighbors, family and coworkers on the adoption decision of alternative fuel vehicles. Transportation Research Part A.

Mannberg, A., Jansson, J., Pettersson, T., Brännlund, R. & Lindgren, U. (manuscript): Contagious neighborhoods? Effects of social interaction on green car adoption in metropolitan Sweden.

Pettersson, T., Mannberg, A., Jansson, J., Brännlund, R. & Lindgren, U. (manuscript): A history of policy conflicts - The greening of the Swedish car fleet since the 1990s.

Web pages

Urban Lindgren (www.umu.se); Andrea Mannberg (www.umu.se and www.uit.no); Johan Jansson (www.umu.se); Thomas Pettersson (www.umu.se); Runar Brännlund (www.umu.se)