Does the hybrid Toyota Prius lead to rebound effects ...

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Ecological Economics 5

ANALYSIS

Does the hybrid Toyota Prius lead to rebound effects? Analysis of

size and number of cars previously owned by Swiss Prius buyers

Peter de Haan *, Michel G. Mueller, Anja Peters

Swiss Federal Institute of Technology, Department of Environmental Sciences, HES- NSSI, 8092 Zurich, Switzerland

Received 14 May 2005; received in revised form 4 August 2005; accepted 17 August 2005

Available online 5 October 2005

Abstract

Hybrid powertrains are considered being a promising technology to decrease fuel consumption of passenger cars. Sales

numbers of hybrid cars are expected to rise considerably until 2010. However, the introduction of more efficient products is

often accompanied by rebound effects, which counteract the positive effect of increased efficiency. We investigate two kinds of

direct rebound effects that could possibly occur when buying hybrid cars: (i) people could tend to switch from small and/or

already fuel-efficient cars to the new hybrid car, and (ii) the average vehicle ownership could increase, if the hybrid car is often

purchased without disposing of an already owned vehicle. A survey was conducted with all 367 buyers of the Toyota Prius 2 in

Switzerland in the first nine months after market entry.

Return rate reached 82.6%without sending out reminders. The survey-based approach does not allow us to investigate whether

hybrid drivers will in the future drive more (the classical example of the direct rebound effect). Detailed data on the car replaced by

the Prius and on the other cars owned by the household were collected. Our analysis shows that average CO2 emissions dropped

from 210 g/km for the previously owned vehicles to 104 g for the Prius. Empty vehicle weight (curb weight) increased by 9 kg

only, which is below the market trend. A constant population-averaged vehicle ownership still allows for a certain amount of first-

time car purchases and for increasing vehicle ownership for individual households, as these additional cars are compensated for by

other households disposing of a vehicle. We present a new vehicle ownership model which assesses whether the vehicle

transaction behavior of a sample of new car buyers corresponds, on average, to constant or increasing vehicle ownership. It is

based on disaggregated data from the Swiss travel behavior micro census. Model results are consistent with market data and data

from literature. Model results show that if ca. 20% of car purchases do not replace a vehicle (for a population with an age

distribution identical to Prius buyers), this still allows for constant average household vehicle ownership. Only 13.7% of the

surveyed Prius buyers did not replace an old car. Hence neither of the two rebound effects investigated could be found though the

sample would have been large enough to do so: vehicle size did not increase, nor did average household vehicle ownership.

D 2005 Elsevier B.V. All rights reserved.

Keywords: Hybrid cars; Direct rebound effect; Survey; Fuel consumption; Vehicle size; Vehicle ownership; Vehicle transaction; Energy-

efficiency

0921-8009/$ - s

doi:10.1016/j.ec

* Correspondin

E-mail addre

8 (2006) 592–605

ee front matter D 2005 Elsevier B.V. All rights reserved.

olecon.2005.08.009

g author. Tel.: +41 44 632 49 78; fax: +41 44 632 10 29.

ss: [email protected] (P. de Haan).

P. de Haan et al. / Ecological Economics 58 (2006) 592–605 593

1. Introduction

The increasing consumption of primary energy

worldwide is of increasing concern because of the

greenhouse effect of CO2 emissions, and because con-

ventional oil and natural gas supplies are expected to

decline in the not-too distant future (IEA and OECD,

2003). This leads to greater interest in energy-efficient

technologies, as technology still is the most important

source for energy saving (Berkhout et al., 2000; Her-

ring, 2006). The reshaping of existing patterns of

energy consumption strongly affects the transportation

sector, which accounts for 21.8% of total primary

energy consumption worldwide in 2000, and will

account for ca. 34% in 2050 (OECD countries:

28.1% and 40%, respectively) (IEA and OECD,

2003). Road transport is the second-largest sector of

energy consumption, right after energy needed for

HVAC (heating, ventilation, air conditioning).

In the European Union (EU), emissions of green-

house gases from transport (excluding international

aviation and maritime shipping) increased by 19%

between 1990 and 2000, contributing a fifth of total

greenhouse gas emissions in 2000. CO2 is the main

contributor to transport greenhouse emissions (97%)

and road transport is in turn the largest contributor to

these CO2 emissions (92% in 2000). The voluntary

agreements of the car manufacturers with the EU

commission to reduce average CO2 emissions from

new cars help to slow the growth of car transport

emissions in the EU (EEA, 2002), and technological

progress is expected for future decades (MacLean and

Lave, 2003). Still, road transport and domestic avia-

tion are the fastest growing contributors to transport

CO2 emissions with increases of 20% and 29%,

respectively, between 1990 and 2000.

For the near future, hybrid powertrains are con-

sidered being a promising option to decrease fuel

consumption of passenger cars (Bitsche and Gutman,

2004). The few hybrid car models currently avail-

able have increasing sales numbers, and most large

car manufacturers have announced hybrid cars for

the coming years. In 2004, 8 vehicle models utiliz-

ing hybrid-electric powertrains were on the U.S.

market and had sales of 88,000 units (0.52% market

share). JDP-LMC (2005) forecasts that by 2011, 38

models will total to 535,000 sold units and 3% of

U.S. sales.

Hybrid cars are an energy-efficient technology,

however, the introduction of more efficient products

is often accompanied by rebound effects, which

counteract the positive effect of increased efficiency.

The definition, identification and quantification of

rebound effects are areas of ongoing research (Green-

ing et al., 2000; Grepperud and Rasmussen, 2004).

The rebound effect is also called take-back effect or

backfire effect. Its definition varies among research-

ers, but the common denominator is that if a product

or service becomes more efficient (regarding energy

use or the use of some other resource), it will also

become cheaper, which might give rise to increased

demand. Generally, three different rebound effects

might be induced (Berkhout et al., 2000): increased

demand for the same service as it has become cheaper

(direct rebound effect), increased demand for other

services as money (i.e., purchasing power) has

become available (indirect rebound effect; also called

secondary rebound effect), and structural effects on

larger parts of the economy due to changed demand,

production and distribution patterns (macro-scale

rebound effect; also called economy-wide rebound

effect). For example, if the energy efficiency of a

car is increased by technological innovations, 100

km can be driven with less fuel and hence at a

lower cost. This lower cost could have the conse-

quence that people drive more and longer because

mobility has become cheaper. Identification of occur-

rence, and, if present, quantification of rebound

effects are generally not straightforward. Most work

has been done on the effects of the introduction of

energy-saving technologies, e.g., space heating (Haas

and Biermayr, 2000).

Rebound effects induced by costs savings were the

first to be investigated and originate in economics,

especially energy economics. In close analogy, also

time savings and the reduction of socio-psychological

costs of ownership might be regarded as possible

drivers for rebound effects. As example for the latter,

it may well be not the financial but the socio-psycho-

logical cost-of-ownership (due to neighborhood pres-

sure, norms of a peer group, etc.) that prevents people

from buying sport-utility vehicles (SUV). However,

this could change as soon as SUVs with hybrid

powertrain enter the market.

The present paper aims at identifying the occur-

rence, and, if present, at quantifying (direct) rebound

P. de Haan et al. / Ecological Economics 58 (2006) 592–605594

effects accompanying the introduction of hybrid vehi-

cles. Are hybrid cars, which are an energy-efficient

technology, effective as well? We investigate two

kinds of direct rebound effects that could possibly

occur when buying hybrid cars: (i) people could

tend to switch from small and/or already fuel-efficient

cars to the new hybrid car, and (ii) average household

vehicle ownership (HVO) could increase if people

either tended to purchase the hybrid car as additional

household vehicle without disposing of an already

owned vehicle, or because the availability of hybrid

cars could make the decisive difference for a house-

hold to purchase a vehicle for the first time. At present

hybrid cars are more expensive than their conven-

tional counterparts, but have lower fuel costs. Driving

factors for the rebound effects under investigation

could be of both, socio-psychological and economic

origin.

Whereas size and fuel efficiency of previously

owned cars can easily be obtained and analyzed

using survey data, assessment of possible increases

in average HVO is challenging. A constant popula-

tion-averaged HVO still allows for a certain amount

of first-time car purchases and for increasing vehicle

ownership for individual households, as these addi-

tional cars are compensated for by households

decreasing their vehicle ownership (reduction of car

fleet after grown-up children leave parental home, or

by elderly people due to health reasons, etc.). We

present a new vehicle ownership model which

assesses whether the vehicle transaction behavior of

a sample of new car buyers corresponds to a con-

stant or an increasing population-averaged HVO.

The paper is structured as follows. Section 2 pre-

sents research objective and hypotheses. The study

area (purchasers of the second generation Toyota

Prius in Switzerland in the first 9 months after market

entry) and the method chosen (mail-back survey) are

introduced in Section 3. Section 4 presents the results

of the survey, and investigates the presence of the first

rebound effect mentioned above. Section 5 introduces

our household car ownership and car transaction

model, and investigates with its help the presence of

the second rebound effect. Section 6 discusses our

findings in detail, and Section 7 presents our conclud-

ing remarks with regard to rebound effects, the effec-

tiveness of environmental policies promoting hybrid

car ownership, and consequences for future research.

2. Rebound effects and purchase of new cars

2.1. Economic rebound effects

When cars become more fuel-efficient, three levels

of rebound effects can possibly occur: direct, indirect,

and macro-level effects (Berkhout et al., 2000).

Increased fuel efficiency means lower fuel costs and

hence lower costs for transportation services. Accord-

ing to the text book, if the use of a car costs less,

people will use more car services. They prefer the car

to public transport, drive longer trips, or do not bother

to switch off the idling engine when waiting for a train

to cross the road. This is called the direct rebound

effect (e.g. Binswanger, 2001), which is, if present,

always negative.

In addition, the reduced fuel bill increases purchas-

ing power. This leads to more expenditure for other

commodities, among which most also require energy

use, for construction and/or operation. This is called

the indirect rebound effect. It is often not possible to

tell what other commodities show an increase (Hert-

wich, 2005). One solution is to assume an average

linear relationship between energy-intensity and

money, or between energy-intensity and time (Jalas,

2002). The indirect (or secondary) rebound effect may

be either positive or negative, depending on the fact

whether the service which has become cheaper (more

efficient) previously had an above-average or a below-

average energy intensity (i.e., energy need per cost

unit). The third rebound effect could occur on a macro

level. It is also denoted as the economy-wide rebound

effect. The shift of spending patterns of households

and companies by the first-order effects (direct and

indirect rebound effects) leads to a shift of the sales

pattern of the production sector: a structure effect

(Grepperud and Rasmussen, 2004). The structure

effect has consequences for energy demand. The net

effect can be either positive or negative.

The direct rebound effect is computed simply as

the difference between bcalculated savingsQ (applyingthe ceteris paribus assumption, i.e., the amount of

services consumed does not increase) and actual sav-

ings, obtained through e.g. observation. For example,

a direct rebound effect of 20% to 30% is reported in

the case of more energy-efficient space heating (Haas

and Biermayr, 2000). It is more difficult to quantify

the indirect rebound effect. One possibility is the


approach adopted by Jalas (2002). By means of sta-

tistical regression, a linear relationship between time

and energy-intensity is derived. Any gains in time,

e.g. due to higher travel speed, are (then) assumed to

be invested in other activities with average energy-

intensity per time unit. Using money instead of time,

and reduced costs instead of higher travel speed,

would be straightforward. There is a risk of double-

counting when inconsistent definitions of rebound

effects are compared with each other. For example,

the so-called indirect rebound effect as investigated by

Jalas (2002) in fact is the sum of direct and indirect

rebound as used in this paper, which are based on

Berkhout et al. (2000). The macro-level rebound

effect can hardly be separated from other technologi-

cal trends and long-term changes in the ratio of GDP

to energy-efficiency (Birol and Keppler, 2000; Schip-

per and Grubb, 2000; Schipper et al., 2001). Laitner

(2000) through simulation obtained an estimate of 2–

3%. On the other hand, Brookes (2000) and Saunders

(2000) argue that it is likely that this effect does not

exist. Jaccard and Bataille (2000) also argue that,

because there is only a weak substitution between

capital and energy, macro-scale rebound effects will

also be relatively small.

2.2. Socio-psychological rebound effects

The so-called economic rebound effects presented

in the preceding section are well-known and accepted.

They are caused by reduction of monetary cost per

service (like driving a car for one kilometer), for

example as a result of improved energy-efficiency.

Hertwich (2005) argues that even when price-based

rebound effects are not to be expected, other effects

might occur (with either positive or negative sign). For

the present study, we also regard what we call socio-

psychological rebound effects, which can be present if

the social cost and/or the psychological cost attributed

to the consumption of a given service is reduced. For

example, in some neighborhoods especially in Europe,

owning a SUV with high fuel consumption might be

accompanied by disapproval from neighbors, family

members, or other peers, which might prevent people

from buying such vehicles. With reversed signs, driv-

ing a particularly fuel-efficient vehicle will often go

hand-in-hand with appraisal from (part of) the social

network. On the psychological side, people might have

norms or preferences (benvironmental conscienceQ)which prevent them from owning vehicles with high

fuel consumption.

It would be possible to define, in close analogy to

economic rebound effects, both direct and indirect

socio-psychological rebound effects. Examples of

direct effects would be to drive more frequently and

longer with a more fuel-efficient car, and to purchase a

fuel-efficient car (for example as second car for a

household) where otherwise no car would have been

purchased at all. An indirect effect would mean that

people use up their social bcreditQ they earned by

purchasing a fuel-efficient vehicle by pursuing other

hobbies which are disliked by public opinion or by the

relevant social network (like smoking, wearing fur,

hunting, heli-skiing, etc.). However, we would like to

leave indirect socio-psychological rebound effects for

future research by other scientists. In the present

paper, we concentrate on the investigation of direct

socio-psychological rebound effects only.

It may seem fruitless at first sight to distinguish

between economic and socio-psychological rebound

effects. If somebody buys a new fuel-efficient car and

drives more than before, how to tell whether this is

done out of economic reasoning or because social

sanctioning and/or remorse have decreased? But in

the case of passenger cars with hybrid powertrain, this

distinction does make sense, as hybrid cars are more

expensive (and will remain so in the future, due to all

additional technology needed for hybrid powertrains).

On the long run, hybrid cars, if they prove to be

successful, will have a surplus sales price correspond-

ing to the savings on fuel costs in the first, say, five

years of car ownership. So rationally speaking, there

is no room for economically justified rebound effects,

as costs per vehicle kilometer do not change. They are

only shifted from operation to investment costs. So if

a rebound effect is observed, we argue that its origin is

primarily of socio-psychological nature.

2.3. Research questions

The present study aims at investigating whether

two direct rebound effects are present, and, if so,

can be quantified:

- Direct rebound effect number 1 (DRE1): above-

trend increase in car size;


- Direct rebound effect number 2 (DRE2): increase

in average household car ownership.

Another possibly occurring direct rebound effect,

increased mileage, is not the topic of the present study

as a priori statements of car owners on the amount of

kilometers they will drive are not reliable.

Investigation on the presence of DRE1 is straight-

forward. We adopt empty vehicle weight (curb

weight) as surrogate for bcar sizeQ. Since roughly 20

years, average empty vehicle weight of new car regis-

trations is increasing in Europe (including Switzer-

land) and Northern America. A rebound effect can

only be considered as present if an increase in empty

vehicle weight (defined as the weight of the Toyota

Prius minus the average weight of the previously

owned vehicles which are replaced by the Prius) is

higher than this general trend. The Prius’ hybrid

technology is responsible for some 170 kg of extra

weight. Using empty vehicle weight as a surrogate for

car size or luxury level, these 170 kg should be

deducted. On the other hand, light-weight materials

have been used in the Prius to compensate for these

170 kg. So to be on the save side, we use Prius’ curb

weight bas isQ.We expect that DRE1 will not be observed out of

economic reasons, because sales price for a hybrid

vehicle is higher than for a vehicle with conventional

powertrain. This higher sales price compensates partly

or completely for any fuel reduction. In the U.S., the

Prius sells at USD 3500 more than the Toyota Corolla,

which is not paid back over a vehicle lifetime of

250,000 km at current U.S. gasoline prices (Lave

and MacLean, 2002). In Switzerland, where fuel

prices (EUR 0.9–1.0 per liter) are higher than in

Northern America but lower compared to surrounding

European countries, surplus price is EUR 5000, which

does pay back after ca. 160,000 km, which is the

average vehicle lifetime in Switzerland. However,

due to the reduced socio-psychological costs of car

ownership, a slight increase in car size could be

present and observable.

Investigation of the presence of DRE2 is not

straightforward. Even though it is simple to conclude

for an entire population whether average HVO has

increased or not, this same question is hard to answer

for a sample of new car buyers that answered a mail-

back survey. In any population, young households or

individuals will at some time purchase a vehicle for

the first time. And in correspondence, old households

or individuals will at some point in life discard their

last vehicle. So seen from the viewpoint of an indivi-

dual, there always is a first-time car purchase at first,

followed by several car replacements, and possibly

accompanied with the first-time purchase of a second

car, etc. This means that in order to test for the

presence of DRE2, we first need to know what ratio

of first-time buyers on the one hand, and car replace-

ments on the other hand, is normal for the population

of Switzerland. Then, we can compare the observed

ratio of our Prius sample with this benchmark ratio.

As there is no economic driver for DRE2, we expect

that DRE2 is not present out of economic reasons.

However, with regard to car ownership, the reduced

socio-psychological costs (of car ownership) could

take their full effect here. Possibly the introduction

of the Toyota Prius as the first fully functional hybrid

vehicle leads to surplus purchases.

2.4. On the Toyota Prius

The Prius was first introduced in Japan in 1997,

with a redesign of the batteries by the year 2000. In

2004, the second-generation, reworked Prius entered

the market. Only this year 2004 version of the Prius,

called Prius 2 among experts, is the topic of the

present study. In Switzerland in 2004, the Prius 2

sold at a net base price of 37,000 CHF. This is roughly

7500 CHF more than the price of a comparable

Toyota Corolla, which is sometimes regarded as

being the conventional counterpart to the hybrid

Prius 2. It should be noted, however, that Prius and

Corolla are distinct cars and do not correspond in all

respects. On the automobile market, Prius is rather to

be positioned between Corolla and the next-higher

model, Toyota Avensis. It therefore is hard to tell at

what price a non-hybrid, conventional Prius would

sell.

3. Design of the mail-back survey

We conducted a mail-out mail-back survey in Sep-

tember 2004 with all Swiss buyers of the hybrid

Toyota Prius 2 since its market entry in May 2004.

Questionnaires were not numbered or otherwise iden-


tifiable, and no reminder letters were sent out. Out of

367 questionnaires, 303 (82.56%) were returned. The

questionnaire consisted of 5 blocks with a total of 33

closed questions and 2 additional open questions of

general scope. Item block A (7 questions) deals with

the car purchased, whether an old vehicle had been

disposed of (and if yes, what kind of car), and which

other vehicles are owned by the household. Block B

consists of 7 questions, plus 1 general open question,

addressing the car choice behavior (brand loyalty,

other persons involved in the purchase decision, pre-

ferences, etc.). Block C with 5 knowledge questions

on the Toyota Prius and its technical characteristics

follows. Block D addresses the mobility behavior (7

questions on season ticket ownership for public trans-

port, parking space availability, and commuting beha-

vior). The remaining 7 questions of block E serve

socio-demographic statistics. The questionnaire closes

with a last open question for any remaining remark.

The complete questionnaire (in German or in French)

may be obtained from the corresponding author upon

request.

Special care was taken of the design of item block

A. In most questionnaires, people are asked to give

brand, model name and sometimes vintage of any

vehicle the household owns. In the present survey,

people where asked to give also engine capacity (in

liters), gear type (automatic or manual), fuel type

(gasoline or diesel), and model year (vintage). These

data allow for a precise identification of any vehicle in

the Swiss data base on vehicle type registrations and

provide us with all technical characteristics including

size, weight, and fuel consumption of the vehicle.

There also is redundancy such that missing data can

often be filled in. For example, fuel type can in most

Table 1

Vehicle transaction statistics

Questionnaires Sent out

Received

Used for this study*

Prius 2 sold Total

As replacement of Prius 1

As replacement of other vehicle

As first vehicle of household (first time buy

As additional vehicle of household

*1 questionnare of commercial buyer with stock of N1000 vehicles and n

analysis.

cases be derived from engine capacity (and the other

way round: imprecise engine capacity can be cor-

rected for using fuel type), automatic gear often has

not been sold for smaller engine sizes, etc.

The data quality of the returned questionnaires was

unusually high and allowed for the precise identifica-

tion of over 97% of all vehicles that were owned by

the households prior to the purchase of the Prius 2.

For the remaining 2.9% of vehicles, we assigned the

most-sold car type for the brand, model and vintage

specified. In the remainder of the present paper, we

will focus on the analysis of the previously owned

vehicles (directly replaced by the Prius) in order to

investigate the presence of DRE1, and on all vehicles

owned by the household, together with socio-demo-

graphic data, to investigate the presence of DRE2.

4. Results

Here we report on the results of question block A

of the survey. Results on Blocks B to E will be

published separately. 302 questionnaires were used

for the present analysis (Table 1). Table 2 lists

averages of fuel consumption, empty vehicle weight

(curb weight), share of diesel fuel, and gearbox types

both for all vehicles owned by the survey households

and for those vehicles having been replaced by the

Prius. In the remainder of this section we investigate

the possible occurrence of DRE1 (direct rebound

effect number 1, which would mean an above-trend

increase in car size). As surrogate for bcar sizeQ we useempty vehicle weight, and also regard engine capa-

city. Presence of DRE1 would mean that people

owned smaller cars prior to the purchase of the

367 100%

303 82.6%

302 82.3%

302 100%

17 5.6%

252 83.4%

er) 9 3.0%

24 7.9%

o definable predecessor vehicle has been excluded for the present

Table 2

Aggregated characteristics of previously owned vehicles

Unit All cars Replaced cars* Prius 2

Nr. of cars – 475 252

CO2 emissions g km�1 206.5 210.5 104

Fuel consumption liter (100 km)�1 8.58 8.75 4.3

Fuel efficiency U.S. miles per U.S. gallon 27.58 27.03 55.01

Empty (curb) Weight*** kg 1356 1366 1375

Length m 4.32 4.38 4.45

Engine capacity cm3 2052 2057 1497

Rated maximum power kW 102.8 103.0 57.0**

Share of diesel % 5.9% 6.3% (Prius=gasoline)

First registration years 1997.7 1996.5 (Prius 2=2004.6)

Automatic gearbox % 38.9% 45.2%

Manual gearbox % 55.8% 53.2%

Sequential (no gears) % 5.3% 1.6% (Prius=sequential)

* Excluding 17 Prius 1; ** additional 50 kW short–term from electric engine; *** including 75 kg for the driver and fuel tank filled 90% at least.


Prius. Fig. 1 shows the histogram of empty vehicle

weight of replaced vehicles.

Here we do not regard those cases where the Prius

2 replaced a Prius 1 (first model generation, vintages

1997 to 2002) (17 vehicles). On average, the replaced

vehicle is from mid 1996 (Table 2), had an average

vehicle weight of 1366 kg, and CO2 emissions of

210.5 g/km. Fig. 2 shows the temporal evolution of

average empty vehicle weight and CO2 emissions of

new car registrations since 1990 in Switzerland (CO2

data starts 1996 due to a switch in the official test

0

10

20

30

40

50

60

800-899

900-999

1000-1099

1100-1199

1200-1299

1300-1399

141

empty vehic

nr.

of

cars

Fig. 1. Distribution of empty vehicle weight (inkl. 75 kg for the driver

cycle). Average vehicle weight of new registrations in

Switzerland was 1309 kg in 1996 and 1462 kg in

2004, CO2 emissions dropped from 214.9 to 191.9 g/

km (test cycle: NEDC) (Auto-suisse, 2005).

Our null hypothesis is that if DRE1 would not be

present, an average mid-1996 car of 1309 kg would

on average be replaced in mid 2004 by a car with a

weight of 1462 kg, an increase of 153 kg. The Prius 2

has an empty weight of 1375 k, which is only 9.3 kg

more than for the replaced vehicles in our survey. This

means that we cannot confirm presence of DRE1. In

00-499

1500-1599

1600-1699

1700-1799

1800-1899

1900-1999

>2000

le weight [kg]

and fuel tank 90% filled) of replaced vehicles (without Prius 1).

1100

1150

1200

1250

1300

1350

1400

1450

1500

1990 1992 1994 1996 1998 2000 2002 2004

vintage

wei

gh

t in

kg

190

195

200

205

210

215

220

g C

O2/

veh

-km

empty vehicle weight

CO2 emissions

Fig. 2. Temporal evolution of Swiss average empty vehicle weight (inkl. 75 kg for the driver and fuel tank 90% filled) and CO2 emissions

(NEDC cycle) of new car registrations, from 1990 (1996 for CO2) to 2004. Data from Auto-suisse (2005).


1996, CO2 emission was 214.9 g/km on average. This

corresponds quite well with average CO2 emission of

the vehicles being replaced by the Prius (210.6 g/km,

Table 2). The Prius 2 has a rated CO2 emission of 104

g/km. So the purchase of the Prius means a reduction

from 210 to 104 g/km (a reduction of 50.6%). If the

Prius 2 purchasers had bought an average car instead

of the Prius, their new vehicles would have had a CO2

emission of roughly 192 g/km. Prius CO2 emissions

are 44.5% lower.

Engine capacity was 1944 ccm in 1996 (Swiss

market average; value for 2004 is 1995 ccm), and is

2057 ccm for the replaced vehicles. Hence, the

replaced vehicles are slightly above-average for the

average 1996 fleet regarding weight and engine

capacity, and below average for CO2 emissions.

This is due to the fact that replaced cars have a

6.3% diesel share, higher than the market average

for 1996 of 5.2%. We conclude that they are repre-

sentative, baverageQ vehicles. Prius buyers switched

from an average sized car to a slightly below-average

sized car. This supports the view that the Prius is

perceived as meeting the average, daily needs of the

car owners. Characteristics are also listed for the

sample of all vehicles owned by the surveyed house-

holds prior to the purchase of the Prius 2 (Table 2).

There are no significant differences between the total

sample and the sample of those cars being replaced

by the Prius 2.

5. Assessment of number of vehicles per household

5.1. Types of household vehicle transactions

In this section we investigate the possible occur-

rence of DRE2 (direct rebound effect number 2),

which would mean an increase in the average number

of cars per household. Average household vehicle

ownership (HVO) is a common figure to be found in

statistical reference books. Instead of a whole popula-

tion, we are confronted with 299 households, which

responded to our survey. We know a priori that these

households recently bought a new car (the Prius).

We distinguish five types of vehicle transactions:

- replacement purchase: an old vehicle is disposed

of; the vehicle stock remains constant;

- first-time purchase: the household did not pre-

viously own a vehicle;

- stock increase purchase: the household already

owned one or more cars, of which none is disposed

of, so the vehicle stock increases by one vehicle;

- disposal of one vehicle without replacement, leav-

ing the household with one or more vehicles;

- disposal of the last vehicle owned by the household

without replacement.

The last two transaction types will per definitionem

not show up in a survey of new car purchasers. Fig. 3

veh. 2 Cveh. 1 C C C Cveh. 2 B Cveh. 1 A C C

Household 3 veh. 1Household 2 veh. 1 A C C C

veh. 2 B Cveh. 1 A C C C

Year 0 10 20 30Types of purchase decisions when purchasing a new car:A: first-time buyer B: adding car to household fleet

Household 1

Household 4

Household 5

C: replacing old by new car

Fig. 3. Illustration of the concept for the household car ownership model. A population consisting of 5 households is used as example. Boxes

stand for the time interval during which the household owns a given vehicle (always 10 years in this example). Over the 40 year period depicted,

the 5 households always own 8 vehicles in total, hence average car ownership per household is constant. In this 40 year period, 2 first-time car

purchases are recorded, at 3 occasions a household adds a vehicle to its vehicle fleet, and in the remaining 15 purchase decisions, an already

owned old car is being replaced by a new one.


shows the basic reasoning: even though some house-

holds increase vehicle ownership, other households

reduce the number of owned vehicles. In the example

from Fig. 3, 10% of car purchases are first-time, 15%

concern vehicles added to the fleet of the household,

and the remaining 75% are replacement purchases;

overall, HVO remains constant. In order to assess the

presence of DRE2, we need to know how many first-

time purchases and stock increase purchases, out of

100 new car buyers, are allowed for, such that HVO

does not increase. As shown in Table 1, for the Prius

buyers, 3.0% of the households are first-time buyers.

Another 10.7% are stock increase purchases. Table 3

shows the number of vehicles per household after the

Prius purchase.

5.2. Household vehicle transaction and ownership

model

In this section we present our Household Vehicle

Transaction and Ownership Model (HVTOM).

HVTOM estimates the ratio of car purchases replacing

a vehicle to those that do not. The model is based on

the Swiss travel behavior micro census 2000 (BFS,

2001), basic assumptions regarding car transactions

Table 3

Number of vehicles per household after Prius 2 purchase, including

the Prius 2 itself

Number of cars 1 2 3 4 5 N5

Number of households 151 109 21 10 5 6

Share 50.0% 36.1% 7.0% 3.3% 1.7% 2.0%

and aggregated data of the Swiss car market in the

observed time frame. The micro census data com-

prises data on the car fleet and on the mobility beha-

vior, as well as socio-demographic data of 27,000

households.

As a first step, the car fleet data is aggregated into

the respective car fleet of different age groups (with

steps of one year), defined by the age of the house-

holds’ reference person. The car fleet of each age

group is further split into the first cars, second cars,

and so forth. This is done by assuming that the car with

highest annual mileage is the first car, the car with

second-highest mileage is the second car, etc. Annual

mileage is available from BFS (2001). The resulting

distribution, as depicted in Fig. 4 (upper panel), shows

fluctuations due to the small sample size. To construct

a better image of the reality, we account for the fact

that the number of households (3.18 millions) in

Switzerland is roughly 2 magnitudes larger than in

the micro census sample. Thus, we argue that we

should construct data with variance reduced by one

magnitude. Data-smoothing is done by splines, using

the so-called bcsapsQ function from the Matlab soft-

ware package. First, we apply heavy smoothing to

obtain a base-line distribution without fluctuations.

We then compute the variance of the micro census

distribution with respect to this base-line. Finally, we

apply spline smoothing such that variance is one tenth

the original variance, and further use the thus obtained

distribution (Fig. 4, lower panel).

The Swiss micro census is performed only once

every 5 years and is not a cohort study. Actual vehicle

0

200

400

600

800

1000

18 28 38 48 58 68 78 88 98

age of households' reference person

18 28 38 48 58 68 78 88 98

age of households' reference person

nu

mb

er o

f h

ou

seh

old

s

0

200

400

600

800

1000

nu

mb

er o

f h

ou

seh

old

s

no car owned one or more cars owned two or more cars owned

three or more cars owned four or more cars owned five or more cars owned

six or more cars owned seven or more cars owned

Fig. 4. Upper panel: raw data, as taken from the Swiss travel behavior micro census 2000. Lower panel: smoothed data to account for the small

size of the sample. Data processing is done using the csaps function in Matlab. Explanatory remark: a household owning two vehicles

contributes both to the bar indicating ownership of a first car, and to the bar indicating ownership of a second car.

Fig. 5. The basic idea underlying the model schematically depicted.


transactions for the sample are not known. We thus

mimic the annual amount of vehicle transactions in

form of an bannual transitionQ of the sample’s vehicle

fleet, assuming that the distribution of car ownership

over the age groups does not change from one year to

another. Fig. 5 depicts the basic idea. The car owners

with age a have to buy or sell cars in order to produce

the ownership distribution of owners aged a +1 in the

census: they trade in, or purchase, fraction .of their car

fleet, such that it equals that of age group a +1.

Additionally, they replace fraction rreplace of their car

Table 4

HVTOM predicted data compared to real market data from the year

2001

Model

predictions

Real market

data (2001)

Initial purchases 325,274 317,126

Changes of ownership of used cars 722,187 742,106

Ratio of initial purchases to changes

of ownership of used cars

0.45 0.43

Share of car purchases that do

not directly replace a car

Swiss average 23.30%

Swiss Prius 2 buyers 20.10%


fleet. As there were 3,629,713 passenger cars in Swit-

zerland in 2001 and 742,106 changes of ownership,

the average holding period is 4.89 years (TNS Sofres

(2002) reports 4.43 years). We therefore use rreplace=

0.2. Furthermore, all end-of-life vehicles (ELV) are

scrapped, denoted by fraction rELV. The value of rELVdepends on the age composition of the car fleet; we

simply assume that any car being 14 years or older

will be scrapped, and that any vehicle being 13 years

or younger will survive.

In order to account for all vehicles that are disposed

of, but that are compensated by additional vehicle

purchases of other households within the same age

group (such that these transactions are not already

covered by D, see above), we introduce rinternal.

This parameter was calibrated using aggregated data

of the Swiss car market. It first was calibrated such

that HVTOM reproduced exactly the total number of

vehicle transactions per year (according to the central

Swiss vehicle registry). Second, it was calibrated to

reproduce the number of new car registrations per

year. This resulted in rinternal= 0.069 and 0.103,

respectively. We adopted the mean (rinternal= 0.086)

for final use in HVTOM. Consequently, in HVTOM,

every year approximately 17% of all households

change their fleet size.

5.3. Model results

To account for the possibility of the car owners to

buy used cars, we compute for each car fleet the

fraction of cars in the fleet which are younger than

4 years. The threshold of 4 years has been chosen

based on an analysis of used-car ads on the internet;

average vehicle age among 168 randomly chosen ads

was 4.1 years. The younger the fleet is, the more

likely it is that a purchased car is brand-new. The

annual transition calculated in this model represents

a steady state. The main assumption was that the car-

ownership distribution remains unchanged. Therefore,

socio-demographic trends like longer vehicle owner-

ship (due to increased life expectancy) do not enter the

model. Consequently, the simulated non-replacement

rate of car purchases is consistent with constant HVO.

Using HVTOM we simulate how many cars, for

the Swiss population, did or did not directly replace a

vehicle, and how many cars were bought brand-new

or used. To test the model, the ratio of initial pur-

chases to changes of ownership of used cars is calcu-

lated and compared with market data from the year

2001. The results are listed in Table 4. The calculated

ratio of 0.45 is a satisfying result and thus, the model

seems able to reproduce the relationship between

initial purchases and changes of ownership of used

cars. The computed probability that an average car

purchase in Switzerland does not directly replace a

vehicle is 23.3% (using the age distribution from the

micro census). If the age distribution of the Swiss

Prius 2 buyers is taken into account, the rate of non-

replacement purchases would be 20.1%. This is con-

sistent with data from a French panel survey called

Parc-Auto, yielding 22.8% non-replacement pur-

chases, as reported in Yamamoto et al. (2004).

6. Discussion

The goals of our research were to investigate the

possible presence of two rebound effects that could be

associated with the introduction of hybrid cars on the

Swiss market. As hybrid cars have a lower fuel con-

sumption compared to conventional vehicles of the

same size, people could tend to upgrade from small or

already fuel-efficient vehicles to the hybrid car or

people could tend to increase the number of cars

owned by the household.

For this, we conducted a survey in September 2004

with all Swiss buyers of the hybrid Toyota Prius 2

since its market entry in 2004. 303 out of 367 ques-

tionnaires were returned. The data quality of the

returned questionnaires was unusually high and

allowed for the precise match to official registration

data (including fuel consumption, size and empty


vehicle weight [curb weight]) for almost all vehicles

owned by the surveyed households prior to the pur-

chase of the Prius 2. We thus are able to characterize

with a high level of precision those vehicles that have

been replaced by the Prius 2, allowing for the assess-

ment of the first rebound effect (increase in car size).

In order to analyze the occurrence of the second

rebound effect (possible increase in vehicle owner-

ship), we had to develop a model able to describe the

relationship between first-time car buyers, car repla-

cements, and cases where a new vehicle leads to an

increase in vehicle ownership for the household in

question. This model is based on the Swiss survey on

mobility behavior with over 27,000 households. We

made the important assumption that the Prius 2 may

be considered as being representative, regarding vehi-

cle size and power, for the average Swiss car market.

Our results show that neither of the two rebound

effects could be found. We use empty vehicle weight

as a surrogate for vehicle bsizeQ as perceived by

consumers. Comparing the Prius 2 with those vehicles

it replaced, empty vehicle weight only slightly

increases. Taking into account the general tendency

of increasing vehicle weight and the fact that the

hybrid technology accounts for some 170 kg of

extra weight (which should be neglected if using

weight as a surrogate for bsizeQ), we conclude that

the replacement of 252 vehicles by the Prius 2 has on

average led to a clear decrease in vehicle size, i.e., a

so-called down-sizing could be identified. This could

not be expected a priori, as car size normally increases

during the lifetime of the individual car owner.

With regard to average vehicle ownership, our

HVTOM simulation model gives us the upper limit

for the percentage of non-replacement purchases (i.e.,

the sum of first-time car purchases and for vehicles

added to the household fleet) as 23.3% for the Swiss

population. A value of 20.1% is expected for a con-

sumer group with an age-distribution equal to that of

the Swiss Prius 2 buyers. HVTOM results account for

the used-car market, and are consistent with overall

market statistics and (de)registration figures, and with

other studies from literature. Any population with a

car purchase behavior corresponding to this upper

limit will on the long run not experience an increase

in vehicle ownership. For the buyers of the Prius 2,

the percentage of non-replacement purchases was

13.7%, i.e., clearly below this upper limit. This

means that if the Prius 2 buyers were representative

for the whole Swiss population, vehicle ownership

would in fact decrease.

The above results can partly be explained assuming

that Prius 2 buyers are mostly so-called bearlyadoptersQ to a new product. They are not representa-

tive for the average market (which shows increasing

vehicle weight and increasing vehicle ownership).

Implications of our research are that hybrid cars like

the Prius 2 can be considered not only being efficient

(i.e., fuel-efficient) but also effective (i.e., effective in

lowering annual fuel sales of a population), as the

efficiency gains are not counteracted by rebound

effects. If a government considers promoting the pur-

chase of fuel-efficient vehicles, either with cash

rewards or by introducing tax rebates, hybrid vehicles

are a good target. Such policy measures are generally

targeting bearly adoptersQ, with the aim to enable the

breakthrough of new, more efficient technologies.

Concerning the reliability and validity of our sur-

vey-based results, our survey covered all German and

French speaking buyers of the Prius 2 in Switzerland

(at the time the survey was sent out), of which 82%

responded. Our sample therefore is highly representa-

tive for the entire group. As stated above, the quality

of responses was unusually high, with less then 0.3%

of all questions having missing values, and for 97.1%

of all vehicles owned by the survey households, the

make, model, vintage, type of gear, type of fuel, and

engine capacity where reported such that the vehicle

could be uniquely identified in the official registration

data base.

We leave for future research the investigation of

the third possible rebound effect, increase of vehicle

kilometers driven annually due to the fact that lower

fuel consumption leads to cheaper operation cost.

Binswanger (2001) hypothesizes that this rebound

effect should in fact be present. As discussed in Sec-

tion 2, however, it is expected to be very difficult to

actually confirm the occurrence or non-occurrence of

this rebound effect for any given community of pur-

chasers of a given car.

7. Conclusions and outlook

We showed that purchases of the new hybrid

Toyota Prius 2 exhibited neither of the two direct


rebound effects investigated. On the contrary: vehicle

size slightly decreased, and the low numbers of first-

time buyers and non-replacement vehicles would, if

they were representative for a whole population,

even lead to a decrease in average vehicle owner-

ship. These outcomes are partly due to the fact that

Prius buyers can be considered as bearly adoptersQ.Their behavior is not necessarily representative for

the mass market. Still, our findings strongly support

the view that the Toyota Prius 2 is indeed a product

that effectively combines fuel efficiency and the

satisfaction of consumer needs, and is successful in

replacing daily-use vehicles and becoming the most

used car in a household. Economic points of view,

like the relation between saved fuel and total surplus

cost, have been investigated elsewhere (e.g., Lave

and MacLean, 2002) and are not the topic of the

present paper.

As the hybrid technology causes a cost surplus

compared to vehicles with conventional powertrains

(internal combustion engines), the feasibility of tax

rebates or other means of compensation are currently

in evaluation both in Northern America and in Eur-

ope. Our findings confirm that hybrid vehicles like the

Toyota Prius indeed have a positive effect on total

CO2 emissions from road transport, and that rebound

effects are not yet in sight. Financial support for the

purchase of hybrid vehicles therefore seems to be a

possible and valid environmental policy. Further pro-

gress in fuel-efficiency gains using hybrid powertrains

is to be expected (e.g. Fukuo et al., 2001). In the near

future, new cars equipped with hybrid technology will

come to market in Europe. We intend to conduct

surveys similar to the one presented here for these

other hybrid cars as well. Examples are Honda Civic

IMA and Lexus RX400h. Especially the latter will be

of interest with regard to the postulated existence of

rebound effects due to reduced socio-psychologial

(rather than financial) cost-of-ownership.

Acknowledgements

Thanks go to Toyota Switzerland for financing the

copying and mailing of the questionnaire to the Prius

purchasers and for its translation from German into

French. Toyota Switzerland did not otherwise support

this research.

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