Split Incentives in Residential Energy Consumption
AbstractWe explore two split incentive issues between owners and occupants of residential dwellings: heating or cooling incentives are suboptimal when the occupant does not pay for energy use, and insulation incentives are suboptimal when the occupant cannot perfectly observe the owner's insulation choice. We empirically quantify the effect of these two market failures and how they affect behavior in California. We find that those who pay are 16 percent more likely to change the heating setting at night and owner-occupied dwellings are 20 percent more likely to be insulated in the attic or ceiling. However, in contrast to common conception, we find that only small overall energy savings may be possible from policy interventions aimed at correcting the split incentive issues.
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Bibliographic InfoArticle provided by International Association for Energy Economics in its journal The Energy Journal.
Volume (Year): Volume 33 (2012)
Issue (Month): Number 2 ()
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- F0 - International Economics - - General
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Eficiencia y equidad y las medidas de mejora energética de las edificaciones
by Ana Ramos in Economics for Energy on 2012-03-16 09:29:00
- Newell, Richard G. & Siikamäki, Juha, 2013.
"Nudging Energy Efficiency Behavior: The Role of Information Labels,"
dp-13-17, Resources For the Future.
- Richard G. Newell & Juha V. Siikamäki, 2013. "Nudging Energy Efficiency Behavior: The Role of Information Labels," NBER Working Papers 19224, National Bureau of Economic Research, Inc.
- Mills, Bradford & Schleich, Joachim, 2013. "Household transitions to energy efficient lighting," Working Papers "Sustainability and Innovation" S5/2013, Fraunhofer Institute for Systems and Innovation Research (ISI).
- Xavier Labandeira & Ana Ramos, 2012. "Household Environmental Attitudes and Energy Efficiency in Buildings: Evidence from Spanish Data," Working Papers fa08-2012, Economics for Energy.
- Peter Newton & Peter Newman, 2013. "The Geography of Solar Photovoltaics (PV) and a New Low Carbon Urban Transition Theory," Sustainability, MDPI, Open Access Journal, vol. 5(6), pages 2537-2556, June.
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