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: Understanding the economics of human trafficking

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

Understanding the economics of human trafficking

23 hours ago

Although Europe is one of the strictest regions in the world when it comes to guaranteeing the respect of human rights, the number of people trafficked to or within the EU still amounts to several hundred ...

Affirmative action elicits bias in pro-equality Caucasians

Jul 25, 2014

New research from Simon Fraser University's Beedie School of Business indicates that bias towards the effects of affirmative action exists in not only people opposed to it, but also in those who strongly endorse equality.

Election surprises tend to erode trust in government

Jul 24, 2014

When asked who is going to win an election, people tend to predict their own candidate will come out on top. When that doesn't happen, according to a new study from the University of Georgia, these "surprised losers" often ...

User comments : 1

Adjust slider to filter visible comments by rank

Display comments: newest first

Caliban
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...