While it is common to believe that Millennials are fundamentally disrupting a wide variety of industries due to their divergent preferences—especially the car industry—new research from MIT suggests that this is not the case.
“Many Millennials report they prioritize environmentally friendly products,” says Christopher Knittel of the Sloan School at MIT, but our study shows that the so-called “Green Generation” does not exhibit significantly different preferences when it comes to transport. And that’s bad news for the environment and our battle with climate change.”
The study, Generational Trends in Vehicle Ownership and Use: Are Millennials Any Different? by MIT Sloan School Professors Christopher R. Knittel and Elizabeth Murphy http://ceepr.mit.edu/publications/working-papers/700 focused on two main facets of personal mobility: vehicle ownership, measured by how many vehicles a given household owns, and vehicle usage, measured by annual vehicle miles traveled (VMT). Each of these provides different insights; vehicle ownership gives a better understanding of the market for personal vehicles, while vehicle miles traveled provides insight on vehicle fleet usage as well as environmental footprints.
The authors found that although a simple comparison of average ownership and use would suggest a difference, once you control for confounding variables there is no evidence of a difference. While we find that Millennials are altering life-choices that affect vehicle ownership, the net effect of these endogenous choices is to reduce vehicle ownership by less than one percent.
“These results underline the important of policy in addressing climate change,” says Knittel. “The low vehicle ownership statistics we’ve been quietly hoping will solve climate change are an artifact of the economic conditions and general life cycles Millennials have faced and do not represent some fundamental difference in their demand for cars.”
Despite the fact that many Millennials report that they prioritize environmentally friendly products, the so-called “Green Generation” does not exhibit significantly different preferences when it comes to transport. This does not inherently mean Millennials do not consider the environment in their auto-buying decisions, but for many Millennials having a vehicle may not be a choice.