Research Proposal (Spring 2010)

Consumers’ Belief System and Purchase of Hybrid Car

Ji Hei Lee Texas A&M University

A. Specific Aims

The general aim of this research is to find out factors that determine consumers’ behavior

in a car market where Hybrid Electric Vehicles (HEVs) emerge. First, the framework of

motivation that influences consumers’ behavior will be established through theories of

environmental behavior and literatures relevant to the purchase of HEVs. Secondly, the most

influential factor in the adoption of HEV will be identified, comparing intrinsic factors with

extrinsic factors and analyzing their interaction. Thirdly, Symbolism of HEVs is an important

determinant, so it will be analyzed how it affects other intrinsic factors and is mediated by

external factors and sociodemographic factors. One of the intrinsic factors, knowledge, will

be analyzed in the way how important it is to change other intrinsic motivation and to be

influenced by external factors. Finally, the relationship between intrinsic motivation and

socio-demographic factors will be explored.

The specific aims are:

Phase 1

Specific Aim 1 is to identify the factors that influence consumers’ adoption or rejection of

HEVs by reviewing previous literatures relevant the purchase of clean car.

Hypothesis 1: There are several important factors that influence consumer’s behavior on

HEVs.

Specific aim 2 is to make a framework of consumers’ motivation to purchase HEVs,

borrowing some models from theories of environmental behavior and modifying them with

the factors identified above.

Phase 2

Specific aim 3 is to analyze how intrinsic factors influence each other and how influential

they are to motivate consumers’ purchase of HEVs and to find out how socio-demographic

factors influence the intrinsic motivation.

Hypothesis 3.1: Environmental value and belief have a positive effect on the willingness

to purchase HEVs.

Hypothesis 3.2: Environmental value and belief have a significant, positive effect on the

adoption of HEVs.

Hypothesis 3.3: Habit of buying gasoline car has a negative effect on the willingness to

purchase HEVs.

Hypothesis 3.4: Habit of buying gasoline car has a negative effect on the adoption of

HEVs.

Specific aim 4 is to find out how symbolism, which is one of the unique attributes of HEVs,

influences the purchase decision, with exploring the relationship with other factors.

Hypothesis 4.1: Symbolism has a positive relationship with the environmental value and

belief.

Hypothesis 4.2: Symbolism has a positive relationship with willingness to replace a car.

Hypothesis 4.3: Symbolism has a positive relationship with income.

Hypothesis 4.4: Symbolism has a positive relationship with age.

Hypothesis 4.5: Symbolism has a difference influence on gender.

Hypothesis 4.6: Symbolism of HEVs has a positive effect on the adoption of HEVs. The

strength of the influence is stronger than other extrinsic factors.

Specific aim 5 is to analyze how knowledge can increase other intrinsic motivation and

affects the purchase decision. In addition, it is to explore what relationship knowledge has

with education.

Hypothesis 5.1: Knowledge increases environmental value and belief.

Hypothesis 5.2: Knowledge increases willingness to replace a gasoline car with HEVs.

Hypothesis 5.3: Knowledge has no effect on habit.

Hypothesis 5.4: Knowledge has positive effect on symbolism.

Hypothesis 5.5: Knowledge has a positive effect on the adoption of HEVs.

Specific aim 6 is to find out how socio-demographic factors influence the intrinsic

motivation.

Hypothesis 6.1: Income has a positive effect on willingness to replace a car with HEV.

Hypothesis 6.2: Education has a positive effect on value and belief.

Hypothesis 6.3: Education has a positive effect on knowledge.

Hypothesis 6.4: Education has a positive effect on willingness to replace a car with HEV.

Hypothesis 6.5: Symbolism is more related to income than to education.

B. Background and Significance

Transportation is an infrastructure that is sustained by consuming a great amount of fuel

and energy. “Ninety six percent of transportation in the United States is now based on oil”

(Sandalow 2008, 14). For this reason, the sustainability of transportation has been getting

attention and energy efficient vehicles are coming out in a car market. Over a few years,

Hybrid Electric Vehicles (HEVs) which use less fuel than conventional gasoline cars is

gaining popularity. However, there is still uncertainty about whether hybrid cars will override

the conventional car market. Governments across states and countries seem very firm in

promoting HEVs for economic and environmental reasons. Like any other market, producers,

consumers and government are key players in a car market. Among these key players in the

market, consumers’ decision to purchase is the most critical determinant of HEV market

growth.

1. Sustainable Transportation and Institutions

Technological development has greatly advanced the sustainable transportation as we have

seen in hybrid electric vehicles. However, there is no guarantee that technological change

will support sustainability (Haynes, 2005). Sustainability can be achieved when the

institutional setting drives technological change toward sustainable processes and outcomes.

“Institutions are humanly devised constraints that shape human interaction” (North 1990, 3).

Examples of institutions are deeply embedded values, norms, practices, laws and regulations,

and the diverse actions and behavior patterns of multiple actors (Williamson, 1994).

Institutions influence the direction of technological development and then technology affects

the structure and form of institutions (Haynes, 2005). This role of institution in sustainable

transportation technology calls for government action not only to correct for environmental

effects, but also to facilitate technological change as a partner in public-private collaboration

(Geerlings, 1999). The actors’ behavior, motivation, and their relationship in green vehicle

market can greatly influence the emergence and development of green vehicle market

(Mueller, 2008; Gallagher, 2008; Diamond, 2009; Andrews, 2009). Thus, the behavioral

pattern of local consumers and producers needs to be considered in policymaking. Badly

conditioned institutions may hamper favorable development toward sustainability.

2. The Emerging Hybrid Electric Car Market

To address concerns about climate change and oil supply insecurity, automotive

technologies change rapidly in a direction toward near-zero emission of air pollutants and

greenhouse gas and a diversification of the transport fuel system away from its present

exclusive dependence on petroleum (Ogden, 2004).

Hybrid electric vehicles have been emerging in a car market as an alternative green car,

substituting conventional gasoline cars. Over a couple of decades, they have been evolving in

technology. Hybrid vehicles are driven by

The electricity from carbon-fuel-burning engines on board and batteries

using other energy sources. Hybrids are designed to operate as electric

vehicles in urban areas where air pollution is a problem. Operating on

batteries alone, they typically have a range of 50 to 100 miles. (For

perspective here, the total distance traveled by all the cars in an average

U.S. household is only 41 miles per day.1) Since hybrids are designed

for average loads, not peak loads, they can be relatively small and run at

a constant speed while charging the batteries. Hybrids can be more than

twice as efficient and much less polluting than comparable internal

combustion engine vehicles2 (MacKenzie 1994, 53).

1 Hu, P., & Young, J. Summary of Travel Trends, 1990 Nationwide Personal Transportation Survey. Center for Transportation Analysis, Energy Division, Oak Ridge National Laboratory. 13p. 2 Lovins, A., Barnett, J., & Lovins, L. (1993). Supercars: The coming light-vehicle revolution. Rocky Mountain

The change of a car market toward hybrids depends on cost and benefit of hybrids in

comparison with gasoline car. Societal lifecycle cost is an important indicator to compare the

two options, so it has been widely used to study the effect of vehicle types. Ogden (2004)

calculated the societal lifecycle cost of transportation, including vehicle cost, fuel cost,

externality cost for oil supply security, and damage cost for the emission of air pollutants and

greenhouse gas over the full lifecycle.

A major finding is that most advanced options would not be

competitive on a lifecycle cost basis without internalizing externalities

associated with air-pollutant and green house gas damages and oil

supply insecurity risks. But when such externalities are internalized,

most advanced options offer lower lifecycle costs than typical new cars,

for which externalities account for about half of the lifecycle costs under

base-case conditions (Ogden 2004, 5).

Lipman(2006) analyzed each lifecycle cost of various hybrid cars and found that the least-

cost hybrid vehicle option was very close to those of the conventional gasoline vehicles using

the relatively low gasoline price of $1.46 per gallon. However, he claimed that with recent

higher gasoline prices, many of the more fuel efficient, but costlier, hybrid vehicle designs

become competitive from a lifecycle cost perspective. Goedecke(2007) calculated the societal

life-cycle cost, the consumer life cycle cost for different vehicle technologies.

The result is that under the current conditions the societal life cycle

costs of vehicles which use compressed natural gas as fuel are

significantly lower compared to other technologies. The main reason for

the advantage is the lower fuel price of natural gas. On the other hand,

hybrid vehicles have the highest societal life cycle costs because of the

Institute, Snowmass, CO.

high production costs(Goedecke 2007, 3246).

According to literature on lifecycle cost analysis, the cost of hybrid electric vehicles

exceeds the conventional gasoline car, but given the fact that oil price continue to rise, it

would be expected to become far less than gasoline car in near future. For this reason,

governments and car industry in Europe, America, and Asia have been spurring the

development of green car market even though it is not that attractive option at the current

situation.

On the other hand, Ahn(2008) simulated the changing rates of ownership and fuel

consumption and the emission of pollutants. The result showed that gasoline cars would still

be the consumer’s first choice and that adding alternative fuel cars would lower gasoline

consumption and the emission of pollutants. This result is similar to those using lifecycle cost

analysis. Andrews(2009) used a multiagent-based simulation model to investigate on what

kind of coordination of government policies and producers strategies could make a niche

green car market emerge. The results shows that the emergence of green niche markets

depends on heterogeneity of firms and consumers, that innovative firms are a crucial element,

that government research plus an additional policy, either an information dissemination

campaign or a tax, can dramatically transform the automobile market, and that tax may not

help green product go mainstream.

These results above give a common implication that without any policy or strategy to

facilitate hybrid electric car market, the hybrids would not override the gasoline car in a

market because of its economic disadvantage.

3. Significance

The findings from literature imply that the appropriate coordination of factors influencing

the adoption of hybrids can promote the green car market. The adoption of hybrids is

ultimately determined by consumers because “consumers are the key stakeholder group,

while there are many important stakeholders in the network since no matter how well

prepared the infrastructure and network of collaboration, much of the final purchase decision

rests with the potential buyer”(Byrne 2001, 1526). “The fundamental decision-making units

are households distinguished by sociodemographic characteristics and car

ownership”(Mueller 2009, 1072). This is why the determining factors have been rigorously

studied on consumers’ behavior over the recent few years.

Consumer’s behaviors are influenced by many factors. Each previous literature is dealing

with the relationship between a factor and consumers’ purchase decision. Rarely are

literatures found that analyzed the relationship between factors, especially between intrinsic

factors and extrinsic factors. Actually, consumers’ intrinsic motivation are relatively stable

than external, situational factors of motivation. In order to target consumers to change their

behavior in a car market, it is necessary to examine how intrinsic factors are constructed and

related with each intrinsic factor, and how intrinsic factors are influenced by other external

and socio-demographic factors. This research is to find out the interactions among

determinants of consumer motivation after building a framework of consumer’s motivation

on the adoption of HEVs. The findings of this research would contribute to inform what

factors have strong impact on the growth of green car market. It would also help policy

makers to evaluate the effectiveness of current, past government policies for green car market

and guide government and automakers to make efficient future policy or strategies.

C. Preliminary Studies

Consumers’ motivation to purchase HEVs

There are four categories of determinants of environmentally significant private sphere

behaviors: attitudinal factors (values, beliefs, and norms), personal capabilities (e.g. financial

situation), habits or routines, and contextual forces (Stern, 2000). Not the same but similar

determinants are shown in the literature on consumers’ behavior on the purchase of HEVs.

Examining impediments to sustainable transportation, Byrne (2001) pointed out several key

elements to influence consumer’s adoption: the supporting infrastructure, the availability of

alternative fuels, the availability of fuel delivery outlets, the availability of maintenance

services, and vehicle characteristics. Heffner et al. (2005) conducted detailed interviews with

households in Northern California that own hybrid electric vehicles, and found that both

anticipated cost savings and the “green image” of hybrids influence purchase decisions. Haan

(2006) showed that hybrid car buyers had a significantly higher household income and

education level. Cao et al. (2006) and Potoglou (2007) introduced neighborhood

characteristics at the place of residence (e.g. urban form measures) as covariates of a

household’s vehicle type choices. According to Potoglou(2007), reduced monetary costs,

purchase tax relieves and low emission rates are the factors encouraging households to adopt

a cleaner vehicle. Kahn(2007) found that environmentalism was associated with hybrid

ownership, based on regression analysis of census data in six California cities. Lane(2007)

found that high purchase price, ease and convenience of use, fueling infrastructure, and

‘green’ credentials were important in the purchase decision. In Diamond(2009), HEV lane

incentive, along with income and environmentalism was significant predictors of market

share. In Gallagher and Muehlegger (2008), state tax waivers, average income, and social

preferences were significant. Diamond (2009) found that there was a strong relationship

between gasoline price and hybrid adoption, that much weaker relationship between

incentives policies and hybrid adoption. Coad (2009) showed that information provision and

financial incentive policies would encourage consumers to adopt green cars. Henry(2009)

analyzed the correlation between cultural values and consumer behavior in car purchase

decision by using socio-demographic variables such as social class, age, family size, income,

man’s relation to others.

The factors can be summarized by intrinsic factors (environmentalism, knowledge, and

symbolism), extrinsic factors (vehicle price and maintenance cost, vehicle attributes,

convenience of vehicles, infrastructure, and economic and regulatory incentives), and socio-

demographic factors (income, age, education, gender, and family size).

Environmental behavior theories

What makes the intrinsic, psychological factors of particular interest is that, not only do

they influence behavior directly, but also they mediate the more objective situational issues.

For example, it is often about how consumers perceive economic environment that influences

their purchasing behavior rather than the actual costs(Lane, 2007) .

One of the most common set of determinants that research within environmental

psychology has focused on is the attitudinal factors frequently conceptualized in Value-

Belief-Norm theory (VBN; Stern, 2000). The VBN theory postulates that the relationship

between values and actual behavior is mediated by personal moral norms. Thus values,

general environmental beliefs such as a general problem awareness, awareness of the adverse

environmental effects of human actions (awareness of consequences), and belief in that own

actions could prevent those effects (ascription of responsibility), activate a personal norm,

experienced as a feeling of moral obligation, to act pro-environmentally. The Values-Belief-

Norms (VBN) theory causally links values and beliefs, with personal norms and actual

behavior. The VBN theory implies that social, egoistic and biospheric value systems are the

most stable determinants of pro-environmental actions.

Ajzen’s Theory of Planned Behavior(TPB) attempts to explain the causal link between

values, beliefs, attitudes, intentions and behavior. The theory proposes that when given a

behavioral choice, an individual will consider the alternatives and assesses their

consequences based on their beliefs relating to the actions and their effects. These beliefs

determine an individual’s attitudes regarding the possible actions, which in turn influence the

intention to act – behavioral intention being a strong indicator of the actual behavior chosen.

The beliefs central to TPB include behavioral beliefs (related to the consequences of certain

actions), normative beliefs (perceived expectations of others) and control beliefs (the actions/

effects that an individual believes can be enacted/influenced). These beliefs are strongly

influenced by a person’s values and are dependent to some degree on the information

available to the individual. The theory TPB “views the individual mainly as a utility

maximizing actor.”

One important factor relevant to the study of consumer choice includes habitual behavior

whereby new actions are instigated without the mediation of attitudes or intentions. When

considering different types of pro-environmental behaviors, it becomes clear that habits

influence curtailment behaviors more than they influence purchase behaviors (Jansson,

Marell, & Nordlund, in press). For example, the routine of turning off hot water while

soaping up in the shower can quickly become a habit, but the purchasing of a more water

efficient showerhead necessitates more deliberation as it occurs less frequently.

Influencing as it does values, beliefs, and norms, knowledge is also identified as an

important factor in understanding pro-environmental consumer choice. There is evidence that

consumers of all types have a very low knowledge base regarding the impacts of low carbon

and fuel-efficient vehicles. Although car buyers’ economic concerns are high, the review

suggests that the level of knowledge regarding actual car costs is very low. Car owners are

most aware of fuel costs, road tax and insurance, but private car owners are particularly

unaware of the cost of depreciation (Lane, 2007).

The level of knowledge can be a powerful predictor of behavioral intentions. A

heightened level of knowledge would arguably lead to stronger beliefs about a specific

behavior. There are also different types of knowledge, from superficial awareness of a

product or problem, to more in-depth knowledge of possible modes of actions and

consequences of these actions (Moreau, Lehmann, & Markman, 2001). Ellen (1994),

investigating the effects of objective and subjective knowledge on proenvironmental

behaviors, found that subjective knowledge was related to behaviors (committed recycling,

source reduction, and political action to reduce problems of solid waste) more than objective

knowledge.

Contextual forces, external forces, are another important determinant of proenvironmental

behavior. These comprise facilitators and constraints of the built environment, public policy,

community expectations, and various features of the broad social, economic, and political

context (Stern, 2000). Contextual forces might have different meanings for different people

and thus affect the individual's willingness to perform proenvironmental behaviors. From a

consumer behavior perspective, the perception of contextual forces and the effect of

perceptions on willingness for actual behavior might be more relevant than an objective

measure of the contextual factors.

Symbolism

Many consumers use the symbolic benefits of automobiles to establish, reinforce, and

communicate aspects of their own identities. It has been widely observed that individuals in

modern societies have unprecedented freedom to define who they are, and possessions like

automobiles are frequently used as tools in the process of identity-formation. Social status is

perhaps the most recognized symbolic benefit of vehicles, and research confirms that some

automobiles can communicate status.

Like other automobiles, HEVs have symbolic benefits, and these benefits have

importance to consumers. Buyers of economy cars signal to the rest of the world that they are

on a tight budget and have no choice but to save anywhere they can. That purchase tells

the world they "have" to be frugal. The purchase of a Prius tells the world they "want" to

be frugal and much more(Sperling, 2000). Research shows that some HEV owners purchase

their vehicles because the cars have a "green image," are perceived as "socially responsible,"

and represent "environmental stewardship"; the same study also confirms that some HEV

buyers recognize and embrace the communicative ability of their vehicles. It is unclear,

however, just how important the symbolic benefits of HEVs were to these consumers, and

whether these benefits had a major impact on their purchase decisions. (Heffner, 2005)

D. Research Design and Methods

Overview

During Phase 1, the general factors influencing consumers’ adoption of HEVs will be

identified. In addition, the framework of consumers’ motivation will be built through the

theories of environmental behavior and literatures relevant to the purchase of HEVs. During

Phase 2, the effect of intrinsic factors on consumers’ adoption of HEVs will be examined,

given the framework. This will accompany with the analysis of the relationship among

intrinsic factors, the relationship between intrinsic factors and external, situational factors.

During Phase 3, the influence of socio-demographic factors on the function of intrinsic

motivation will be examined.

Phase 1 : The Identification of Factors Influencing Consumers’ Adoption of HEVs &

Building a Comprehensive Framework of Consumers’ Motivation

The factors to be identified in previous studies relevant to HEVs are as follows :

Factors Specification (Parameter)

Car Price price of hybrid electric car, price of gasoline car

Oil Price Oil price

Government Policy sales tax, income tax, tax on gasoline/ Subsidy

Urban form public transportation accessibility, walkability of

residence

Infrastructure convenience of battery charging

Green Preference information on green products, green preference

Sociodemographic education, age, gender

Parking parking availability, parking cost, parking incentive

Car characteristics design, fuel efficiency, size

Intrinsic motivation of proenvironmental behavior is generally categorized as follows.

Table 1. Consumers' intrinsic factors of proenvironmental behavior found in theories of environmental behavior (Jansson, Elucidating Green Consumers, 2010, Journal of Euromarketing)

Value and beliefs Willingness to

reduce energy & replace the car

Habits and routines Knowledge

• Values(egoistic/ altruistic/ biospheric)

• Awareness of consequences

• Ascription of responsibility

• Personal norms

• willingness to cut down on driving

• replacement intentions for alternative fuel vehicle

• Car habit strength

• Car use purpose

• Awareness knowledge

• Principles knowledge

• How-to knowledge

Picture 1. Conceptual model : Consumers' motivation to purchase HEVs

Phase 2, 3 & 4 : The Relationship among Intrinsic Factors, The Relationship between

Intrinsic Factors and Extrinsic Factors and Sociodemographic Factors, and The Effect

of Intrinsic factors on Consumers’ Adoption of HEVs

Subject

Car consumers in the U.S.A. who bought a car in 2009 will be the subject of this study.

Behavioral pattern and motivation are likely to change over time, so recent car consumers

will represent the precise current behavior and the motivation behind it. The subject is two

groups - Hybrid car consumer and Conventional car consumers. The proportion of HEV car

buyers is too small relative to that of conventional gasoline car buyers. Thus, stratification

will be used to draw a random sample.

Sample Size

Sales of Hybrid in 2009 : 290,271

Other vehicles in 2009 : 10,111,729

Hybrids percentage of all vehicles : 2.79%

1) Hybrid buyer

• Ns = _____(290,271) (.5) (.5)________

(290,271-1) (.03/1.96)2 + (.5) (.5)

= 1,063

2) Other vehicle buyer

• Ns = _____(10,111,729) (.5) (.5)________

(10,111,729-1) (.03/1.96)2 + (.5) (.5)

= 1,067

Item Generation and Focus Groups

Items of intrinsic motivation construct are rarely found in previous studies. One of the

examples on value and belief system is as follows : four items will reflect egoistic values

(authority, wealth, social power, and influence) and four other items altruistic values (social

justice, equality, a world in peace, and helpfulness) and another four items biospheric values

(preventing pollution, protecting the environment, respecting the earth, and unity with nature).

The respondents will be asked to rate the importance of the values on a 7-point scale, ranging

from opposed to the value to of supreme importance.

Specific items will be developed through focus group. Focus groups will be conducted to

identify relevant items of consumer's intrinsic motivation to purchase or reject HEVs.

Focus groups have long been utilized as a methodology for developing items

for standardized questionnaires (Sudmen, Bradburn, & Schwarz, 1996), and

providing qualitiative information (Krueger, 1994). Krueger(1994) has

described the steps in planning, implementing and analyzing the qualitative

findings of focus groups. Specifically, focus group interviews can help the

researcher discover the vocabulary and the thinking patterns of the target

group prior to the development of quantitative standard items for survey

questionnaires. Focus groups can also alert researchers to issues that might

have otherwise been missed. (Varni, Adherence Grant IRPG)

Focus groups will be two groups of car consumers - HEV owners and gasoline car

owners . Discussion will focus on 1) how they perceive environment and behave in a given

situation, 2) how they value symbolic benefit of a car, 3) their motivation to purchase or not

purchase HEV. Focus group discussions will be audiotaped and transcribed to synthesize the

information.

A conceptual model outlining the domains that are relevant to consumers' motivation to

purchase HEVs will be developed based on reviews of the empirical literatures and analyses

of the focus group discussion. Rating scales to quantify the proenvironmental value, belief,

norm, attitude, knowledge, and symbolic value will be identified will be developed. A large

pool of items will be generated in this initial phase so that poorly performing items may be

deleted during the cognitive interviewing.

Item Evaluation

The preliminary set of items and rating scales will be evaluated by environmental

psychologist and experienced researcher on vehicle mode and consumer behavior.

Cognitive Interviewing

Cognitive interviewing techniques are now widely used to gain information

from respondents about how they formulate their answers to questionnaires

(Aday, 1996; Sudman et al., 1996; Schwarz & Sudman, 1996). A growing body

of literatures suggests that how a question is asked and how the response choice

is formulated, play key roles in the quality of the data that is collected (Schwartz,

1999). These techniques have been used to identify a variety of problems with

questionnaires, such as awkward wording, redundancy in items, and problematic

terms. Think aloud interviews will be developed that include probing questions,

confidence rating, and requests for paraphrasing of items in the respondent's

own words. (Varni, Adherence Grant IRPG)

Survey

The data on the intrinsic factors and socio-demographic factors will be collected through

a survey. The special area of this research would be confined to the United States. The proper

sample that should be collected is 1,063 for HEV buyers and 1,067 for gasoline car buyers.

Considering the response rate of survey could be low like 30%, the survey will be distributed

to 3,500 for HEV buyers and 3,500 for gasoline car buyers. (=1060 * (100% / 30%)). A

prepaid return envelope will be added to enhance response rate. The questionnaire will be

distributed by mail including a dollar to increase the response rate. The samples will be

randomly selected in the sales and registration data of HEV and conventional car.

Questionnaire

In the first part of the questionnaire, participants will be asked to indicate how important

external factors of motivation are in shaping their decision to purchase HEVs. A 5-point

Likert scale ranging from “not at all important” to “very important” will be used to elicit the

perceived importance of external factors such as vehicle price, gasoline price, availability at

fuel stations, tax incentives, maintenance costs, expected vehicle performance and safety.

The second part of the survey will include items of intrinsic constructs that assesses to

what extent respondents have the value, belief, habit on environment and vehicle purchase. In

addition, items will reflect what extent respondents believe their own behavior contributes

towards a solution to a problem (i.e., by buying biofuels, the consumer feels he/she can

improve the environment). The items will be measured on a 5-point Likert scale.

Furthermore, since product knowledge is an important factor in the decision process, the

respondents will be asked whether they think they gain sufficient information from the

government and the car market with regard to life-cycle cost of HEVs. This will be again

measured on a 5-point Likert scale ranging from “strongly disagree” to “strongly agree”.

Finally, respondents will be asked about their demographic characteristics including age,

gender, education and total net household income level in 2009.

Statistical Analysis

All data will be analyzed with STATA. Frequency tables will be used and bivariate

analyses such as cross-tabulations, independent sample t-tests and one-way ANOVA will be

conducted to compare means between groups of respondents. Cronbach's alpha coefficient

will be used for verification of construct reliability. Correlation analysis and primary

component analysis among factors will be performed to explore the relationship among

factors and the strength of effect. Multi-nominal logit regression will be used to find out how

important the intrinsic factors are on consumer’s purchase of HEVs.

E. Limitation

The subject of this study is current U.S.A. car consumers. The finding of this study on

attitude and behavior cannot be generalized to other consumers living in different culture

where people have different value, norms on environment and transportation mode.

This study will quantify intrinsic factors by nominal or ordinal measure. Values, beliefs,

norms, symbolism, and knowledge are difficult to measure precisely by its nature. The

precision of measuring the variables is a limitation of this research.

One assumption of this research is that HEVs are to reduce energy consumption and

reduce CO2 emission. In some previous studies, however, it is found that HEV could have a

rebound effect. Because of its energy efficiency, consumers might drive more than usual, and

increase the size of car, which results in more energy consumption than using a gasoline car.

Since this study is not to capture this rebound effect, the finding cannot suggest that some

factors found contribute to energy saving by the adoption of HEVs.

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