The differential impact of CO2 penalties, CO2 incentives and information policies on consumer behaviour when purchasing a new motor vehicle

Abstract

The main purpose of this experimental study was to determine the differential impact that a CO2 penalty, a CO2 incentive and information regarding the future fuel costs of a motor vehicle will have on South African consumers’ behaviour when they choose new motor vehicles. The results of the experiment did not find any statistically significant proof that either a CO2 penalty or a CO2 incentive is likely to influence consumers to purchase more fuel-efficient motor vehicles. An information policy that provides consumers with the estimated future fuel costs of motor vehicles also has no meaningful influence. The combination of the information policy with either a CO2 penalty or CO2 incentive also has no meaningful influence. Finally, this study provides statistical evidence that the importance of the fuel economy of a motor vehicle and the consumer’s attitude regarding the protection of the environment can both have a meaningful influence on a consumer’s choice of motor vehicle.