For Gen Y there’s a price to saving the environment

Members of Generation Y are all for saving the environment as long as it doesn’t cost them any more money. Based on a survey of 18- to 30-year-olds, researchers from Michigan State University found that young consumers won’t pay a premium price for an automobile simply because it is environmentally friendly. The determining factor is the automobile’s fuel efficiency.
“It’s all about economic motivation,” said Clay Voorhees, assistant professor of marketing and lead faculty researcher on the project. “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.”
He said the 75 million young adults that make up Gen Y are “maturing into a pragmatic generation that wants to do the right thing for the environment, but also has real economic concerns.”
According to the 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 these same consumers will pay $8,000 more for a vehicle that delivers 15 extra miles per gallon – regardless of whether it’s a hybrid.
Jeremy Vanisacker, a Michigan State graduate student involved in the project, was initially surprised that his fellow Gen Y’ers needed such a large economic incentive to buy an eco-friendly car. But he said it makes sense.
“We’ve grown up with a green mindset but we haven’t really had to pay for it,” said Vanisacker. “Think about curbside recycling and free social networks. As a generation we’ve come to expect more for less.”

It’s a matter of education
Voorhees said auto manufacturers need to do a better job of educating consumers on the financial benefits of owning eco-friendly vehicles. They typically cost more than their combustion-engine counterparts, 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?” Voorhees 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.”
If you expect Gen Y’ers to buy green, then you’re going to have to show them how it’s going to help them save green.
 

Gen Y’ers said they’d only pay $1,500 extra for a $20,000 automobile simply because it is a hybrid and considered environmentally friendly.