Behavioral Economics Commons^™

Conspicuous Conservation: The Prius Effect And Willingness To Pay For Environmental Bona Fides, Steven E. Sexton

Steven E. Sexton

The notion that individuals seek status among their peers predates economics. A considerable literature has relied on status-seeking motives to explain anomalies in consumption behavior, such as upward sloping demand curves and persistent demand for luxury brand items that provide the same functionality as cheaper alternatives. As social norms change, so may the social response to signals. In particular, there is anecdotal evidence that amid growing concern about climate change and environmental degradation, costly signals of austerity may afford the status once reserved for those who displayed ostentation. In this paper, we develop a theory of conspicuous conservation and test …