Go easy on the environment -- and our wallets, says Generation Y

Jan 21, 2010
A study by Clay Voorhees, assistant professor of marketing at Michigan State University, suggests that eco-savvy Gen Y'ers have grown up and are coming to grips with the economic reality of paying bills. Credit: Michigan State University

When it comes to saving the environment, Generation Y is all for it - as long as it comes with an economic benefit, according to new research by Michigan State University in collaboration with Deloitte LLP.

Based on a scientific survey of 18- to 30-year-olds, researchers from MSU's Eli Broad Graduate School of Management found that young consumers will not pay a premium price for an automobile simply because it is environmentally friendly. Instead, the determining factor - by far - is .

Clay Voorhees, MSU assistant professor of marketing and lead faculty researcher on the project, said the findings indicate an eco-savvy generation that has grown up and is coming to grips with the economic reality of paying bills.

"Generation Y is aging, and the stereotypical assumption that they are a spoiled generation of pierced, tattooed outcasts couldn't be further from the truth," Voorhees said. "They're maturing into a pragmatic generation that wants to do the right thing for the environment but also has real economic concerns."

MSU and Deloitte, a New York-based marketing and accounting firm, teamed to study the attitudes toward the auto industry of Gen Y - at 75 million strong, the largest generation since the . MSU also launched an in-depth investigation into Gen Y's view of sustainability as it relates to the industry.

According to the sustainability study, young consumers will pay only $1,500 extra for a $20,000 automobile simply because it is a hybrid and considered environmentally friendly. But those same consumers will pay an additional $8,000 for a vehicle that gets 15 extra miles per gallon - regardless of whether it's a hybrid.

"It's all about economic motivation," Voorhees said. "While people want to do the right thing - they want to save the world, particularly Gen Y - they need an extra incentive on top of the motivation of owning a car that produces less emissions."

Jeremy Vanisacker, an MSU graduate student who was involved in the project, said initially he was surprised that his fellow Gen Y'ers needed such a large economic incentive to buy an eco-friendly car. But the more he thought about it, the more it made sense.

"We've grown up with a green mindset but we haven't really had to pay for it. Think about curbside recycling and free social networks," said Vanisacker, 26, who's scheduled to graduate in May with a master's in business administration. "As a generation we've come to expect more for less."

Voorhees said the auto manufacturers need to do a better job of educating consumers on the financial benefits of owning eco-friendly vehicles, which typically cost more than combustion-engine vehicles but theoretically pay for themselves over time.

"Why put the burden on a Gen Y customer to walk in the showroom and figure out how many miles they have to drive this Ford Fusion before they break even?" he said. "Automotive manufacturers need to make the investment in education to assist consumers in understanding how these technologies work and how they will ultimately help the environment and save them money."

Explore further: Study finds law dramatically curbing need for speed

add to favorites email to friend print save as pdf

Related Stories

Costs of plug-in cars key to broad consumer acceptance

Oct 21, 2009

A University of Michigan survey released today shows widespread consumer interest in buying plug-in hybrid electric vehicles (PHEVs). But the cost of the cars is much more influential than environmental and other non-economic ...

Americans need to save paycheck-to-paycheck

Aug 21, 2008

Americans are better at saving money when they set goals in the near future -- such as next month -- rather than the more distant future, according to a new study by researchers at Rice University and Old Dominion University. ...

Recommended for you

Study finds law dramatically curbing need for speed

Apr 18, 2014

Almost seven years have passed since Ontario's street-racing legislation hit the books and, according to one Western researcher, it has succeeded in putting the brakes on the number of convictions and, more importantly, injuries ...

Newlyweds, be careful what you wish for

Apr 17, 2014

A statistical analysis of the gift "fulfillments" at several hundred online wedding gift registries suggests that wedding guests are caught between a rock and a hard place when it comes to buying an appropriate gift for the ...

Can new understanding avert tragedy?

Apr 17, 2014

As a boy growing up in Syracuse, NY, Sol Hsiang ran an experiment for a school project testing whether plants grow better sprinkled with water vs orange juice. Today, 20 years later, he applies complex statistical ...

Creative activities outside work can improve job performance

Apr 16, 2014

Employees who pursue creative activities outside of work may find that these activities boost their performance on the job, according to a new study by San Francisco State University organizational psychologist Kevin Eschleman ...

User comments : 1

Adjust slider to filter visible comments by rank

Display comments: newest first

1 / 5 (1) Jan 21, 2010
Aha! The New Breed. Consumerus Superioris. Wonder what other moral/ethical razor's edges they are ready to straddle. I'm not sure why I thought they would do any better than their predecessors.
I had hopes, though...

More news stories

Clippers and coiners in 16th-century England

In 2017 a new £1 coin will appear in our pockets with a design extremely difficult to forge. In the mid-16th century, Elizabeth I's government came up with a series of measures to deter "divers evil persons" ...

Growing app industry has developers racing to keep up

Smartphone application developers say they are challenged by the glut of apps as well as the need to update their software to keep up with evolving phone technology, making creative pricing strategies essential to finding ...

Making graphene in your kitchen

Graphene has been touted as a wonder material—the world's thinnest substance, but super-strong. Now scientists say it is so easy to make you could produce some in your kitchen.