The influence of positionality in car-purchasing behaviour on the downsizing of new cars

This paper presents results from stated choice experiments looking at the influence of positionality in peoples’ choices of passenger cars in the Netherlands. It provides evidence that cars are positional goods and that selected car attributes such as size, engine capacity and interior add to their positionality. This suggests downsizing of cars through corrective taxation aimed at CO2 benefits would lead to lower welfare costs than micro-economic welfare theory suggests. The experiments also show that car buyers are very heterogeneous and have a strong predisposition to choose a type of car and its attributes similar to their current car.

Research highlights
► Stated choice experiments examining positionality in car choice behaviour.
► Cars and selected car attributes (size, engine capacity and interior) add to positionality.
► Welfare costs of car-downsizing are lower when positionality is taken into account.
► Car buyers are heterogenic and have a predisposition to choose cars similar to their current car.