This is Mary Walden with economist MW, welcoming you to the economic perspective. Today’s program asks if vehicle buyers value fuel efficiency. Mike, buyers of cars and trucks are often attracted to vehicles with better fuel efficiency for two reasons. One is to help the environment by reducing pollution. Second is to save on fuel expenses, particularly if the vehicle is powered by gas. Do we see this value translated into a willingness of buyers to pay more for fuel efficient vehicles?
- Indeed that’s an important question because usually more fuel efficient vehicles cost more
- A new study used a unique data set t try to answer this simple question: if a new fuel efficient vehicle saves the buyer the equivalent of $1 today in future gas expenses, would the buyer be willing to spend up to $1 more for this vehicle
- Researchers found the answer was no
- Buyers only willing to pay a little less than 50 cents more to save the equivalent of $1 today in future gas expenses
- Probably the biggest reason is uncertainty in predicting future gas prices – the lower they are in the future, the less the savings are
- And with oil being abundant, gas prices haven’t rise like they have in the past
- I’m MW
And I’m Mary Walden for the Economic Perspective, an NC State Extension program from the Department of Agricultural and Resource Economics.