Will They Change Consumer Behaviour?
Our government (minority as it is, yes this is a Canadian-based blog) has just put forward a federal budget that creates incentives for consumers to purchase fuel-efficient cars and a disincentive to purchasing gas guzzlers. The total amounts are a maximum of $2000 as rebate for an eco-car, and a maximum of $4000 for a not-so-eco-car. Let’s do some math here: • The average life of a car is, say 5 years. This is probably a bit long in our current low-interest-gotta-have-everything-new consumerism phase, but let’s work with this 5 year number for the moment. • Say the average consumer drives 20,000 km (that’s 12,000 miles) per year, for a total of 100,000 km over the life of the car. • The Canadian government offered a $2000 rebate on the Toyota Prius, which sips gas at a rate of 4 litres / 100 km (59 MPG). • Say the average price of fuel is $1.00 / litre. According to the Toyota website, the Prius has a 45 litre gas tank. • Let’s assume that the consumer drives the car and gets 80% of t
