Effective environmental marketing of green cars: A nested-logit approach

Using market data, we assess the effectiveness of an eco-marketing campaign on purchases of ‘green’ vehicles. The eco-marketing was designed as a quasi-experiment, having one region exposed to the marketing while the other region was the control. A two-level nested-logit model consistent with utility maximization reveals the campaign had short-term positive effects on green-car sales. Results also indicate green-car buyers come from highly educated communities. Age has a positive but non-linear effect on green car sales.

► We ran an eco-marketing program using a treatment-control quasi-experimental design.
► We evaluate the effectiveness of the marketing program on promoting green car sales.
► We find the program increases sales of greener cars.
► Rough calculations show the program leads to significant environmental improvements.