By: John Townsend
Just about everyone and everything is green these days. And it’s not enough to quietly turn over a new leaf; you’ve got to trumpet your transformation.
In the United States, ballparks and sports stadiums are being celebrated for using environmentally-friendly materials and new, efficient technologies. In India, banks are publicly announcing the launch of green initiatives like paper-free banking, e-statements, and “green offices.”
In Japan, building-top windmills actually have electric motors to keep them spinning when the wind stops (because they would look silly sitting idle). And yes, these windmills actually cost energy, but hey, they look great!
“The message is clear: Helping the planet is nice, but being seen helping the planet is really nice,” said Stephen J. Dubner, co-author of the book Freakonomics and host of the WNYC podcast of the same name. “So, here’s a question for you: How much value do people place on being seen leaning green?”
The answer? Quite a bit, according to the recent WNYC podcast, Hey Baby, Is That a Prius You’re Driving? The podcast features several economists, including twins Steven and Alison Sexton, who introduced a concept they call conspicuous conservation.
“Psychologists have defined competitive altruism as sort of a ‘keeping up with the Joneses’-type concept, but applied to pro-social behavior or efforts to make society better,” Steven Sexton said. “So I’ll be competing with my neighbors to donate to a charity, for instance, or to reduce energy [consumption] or environmental impacts.
“With conspicuous consumption, people are investing in products that provide the same functionality as cheaper alternatives, but they’re flashier, or cost more . . . so that can be wasteful and leave nobody better off. But with conspicuous conservation, the costly effort that individuals are undertaking is providing benefits to society; this rat race could actually be a good thing.”
Items in this category could include your Whole Foods bag made from recycled material that proudly reads, “I love my home … planet earth,” or the solar panels on the roof of your home (on the street side, of course, so that the neighbors can see them), or even the TOMS shoes on your feet.
You’re not paying for just any good or service, but those that meet your needs and let everyone know that you give a little back — keeping waste out of landfills, or generating clean energy, or providing disadvantaged children with name-brand espadrilles.
Toyota’s distinctive hybrid automobile, the Prius, is a great example of conspicuous conservation in material form — by calculated design, no other vehicle on the road looks like it, and it attracts a lot of attention.
“The design is everything about Prius,” said Doug Coleman, product manager at Toyota U.S.A. “You see a Prius. You know what it is. You know it stands for hybrid. And there’s really no other car that stands for hybrid. So having something that’s unique is really important to our buyers.”
The Prius is essentially in a league of its own, despite not being much “greener” than other makes and models. There are two dozen hybrid vehicles on the market, many with similar price tags and fuel efficiencies, but this Toyota controls 48 percent of the hybrid market.
What makes the Prius the best selling hybrid is its one-of-a-kind design, which broadcasts the message: “I’m not a gas guzzler!” Understood, loud and clear.
Economists call this “signaling theory.”
“Signaling theory is another way of talking about showing off, or trying to represent your best face,” said Robin Hanson, economist and polymath at George Mason University. “It’s all about what we do to look good, or at least not to look bad.
“Managing our appearance is actually a lot of what we humans do: trying to understand business, trying to understand jobs, school, even medicine. If you don’t realize that people are trying to manage their image, you miss out on a lot of what’s going on.”
Signaling theory and its role in promoting conspicuous conservation is something to think about the next time you find yourself scribbling down your list of groceries, or retweeting an article and slapping a #socent tag on it, or even rolling up your sleeves to rebuild the American Dream by kickstarting a green collar economy (a movement led by Ashoka Fellow Van Jones). The mission is critical, no question, but there is evidence to suggest that public perception plays a tremendous role in motivating altruistic public actions.
Take the example out of California where the Sacramento Municipal Utility District (SMUD) began mailing statements to customers, rating their energy use compared to that of their neighbors. With their reputations at stake, energy use quickly fell by two percent — simply by giving customers access to that information. Clearly, the perception of normal behavior is a powerful motivator.
People are interested in signaling their concerns about pressing social problems, as well as their contributions to a cause (looking the part). Giving them an outlet to do so can garner the support of new groups of conscious consumers, funders, and fans.
“You’re trying to enhance your reputation or attain some kind of status by undertaking these personally costly actions that benefit others,” Steven Sexton said. “And what’s interesting about these conceptions of altruism — both competitive altruism and reputational motivations for altruism — is that they’re fundamentally selfish. So, they are consistent with traditional neoclassical economics, and they aren’t fundamentally altruism in the purest sense.”
Is signing up to change the world for selfish reasons a bad thing? Do the ends justify the means? Does it matter? Incentivizing changemaking is just fine with me, and it should be done more often, as long as the costs don’t exceed the benefits.