Cheaper or eco-friendly cars: What do consumers prefer? An experimental study on individual and social preferences

The importance of preserving the environment by limiting CO2 emissions is an issue crucial to the modern era. One sector that contributes greatly to the increase in CO2 emissions is transport. In this paper, we assess the importance that consumers attach to the environment when buying a car. Cars are categorized by lifespan and associated production and operating costs. It is well known that consumers pay particular attention to their choices regarding these aspects. Using a laboratory experiment, we aimed to find out whether consumers prefer eco-friendly products over less expensive and non-eco-friendly ones. We analysed whether the results are different when considering individual choices versus social choices. We found that the electric car is preferable to the gasoline car, especially when the charging position is well located, and the possibility exists for rapid recharging. Furthermore, consumers seem to be sensitive to the degree of eco-friendliness. They do choose the more ecological of two electric cars with different environmental impacts, and the public economic incentive positively influences this choice. Concerning the experimental methodology applied, we found a difference in behaviour between “paid” and “unpaid” groups and between social and individual choices.