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Free Riding, Upsizing, and Energy Efficiency Incentives in Maryland Homes

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  • Anna Alberini, Will Gans, and Charles Towe

Abstract

We use a unique dataset that combines an original survey of households, information about the structural characteristics of their homes, utility-provided electricity usage records and program participation status, to study the uptake of energy efficiency incentives and their effect on residential electricity consumption. Attention is restricted to homes where heating and cooling is provided exclusively by air-source heat pumps. We deploy a difference-in-difference study design and find that replacing a heat pump with a new one does reduce electricity usage by 8% on average. The effect differs dramatically across households based upon whether they receive an incentive towards the purchase of a new heat pump. Among incentive recipients, the effect is small, and the larger the incentive, the smaller the reduction in electricity usage. These findings suggest that capital costs are incorporated into the (long-term) cost of energy, generating an apparent rebound effect that is much more pronounced for incentive recipients.

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  • Anna Alberini, Will Gans, and Charles Towe, 2016. "Free Riding, Upsizing, and Energy Efficiency Incentives in Maryland Homes," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
    • Handle: RePEc:aen:journl:ej37-1-alberini
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    Cited by:

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    2. Wichman, Casey J. & Taylor, Laura O. & von Haefen, Roger H., 2016. "Conservation policies: Who responds to price and who responds to prescription?," Journal of Environmental Economics and Management, Elsevier, vol. 79(C), pages 114-134.
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    6. Hammerle, Mara & Burke, Paul J., 2022. "From natural gas to electric appliances: Energy use and emissions implications in Australian homes," Energy Economics, Elsevier, vol. 110(C).
    7. Salomé Bakaloglou and Dorothée Charlier, 2019. "Energy Consumption in the French Residential Sector: How Much do Individual Preferences Matter?," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    8. Alberini, Anna & Ščasný, Milan & Bigano, Andrea, 2018. "Policy- v. individual heterogeneity in the benefits of climate change mitigation: Evidence from a stated-preference survey," Energy Policy, Elsevier, vol. 121(C), pages 565-575.
    9. Giraudet, Louis-Gaëtan, 2020. "Energy efficiency as a credence good: A review of informational barriers to energy savings in the building sector," Energy Economics, Elsevier, vol. 87(C).
    10. Fajardy, M. & Reiner, D M., 2020. "An overview of the electrification of residential and commercial heating and cooling and prospects for decarbonisation," Cambridge Working Papers in Economics 20120, Faculty of Economics, University of Cambridge.
    11. Galina Besstremyannaya & Sergei Golovan, 2019. "Reconsideration of a simple approach to quantile regression for panel data: a comment on the Canay (2011) fixed effects estimator," Working Papers w0249, Center for Economic and Financial Research (CEFIR).
    12. Bettina Chlond & Claire Gavard & Lisa Jeuck, 2023. "How to Support Residential Energy Conservation Cost-Effectively? An analysis of Public Financial Schemes in France," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 85(1), pages 29-63, May.
    13. Carroll, P. & Chesser, M. & Lyons, P., 2020. "Air Source Heat Pumps field studies: A systematic literature review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 134(C).
    14. Spandagos, Constantine & Baark, Erik & Ng, Tze Ling & Yarime, Masaru, 2021. "Social influence and economic intervention policies to save energy at home: Critical questions for the new decade and evidence from air-condition use," Renewable and Sustainable Energy Reviews, Elsevier, vol. 143(C).
    15. Gintare Stankuniene & Dalia Streimikiene & Grigorios L. Kyriakopoulos, 2020. "Systematic Literature Review on Behavioral Barriers of Climate Change Mitigation in Households," Sustainability, MDPI, vol. 12(18), pages 1-18, September.
    16. Fontecha, John E. & Nikolaev, Alexander & Walteros, Jose L. & Zhu, Zhenduo, 2022. "Scientists wanted? A literature review on incentive programs that promote pro-environmental consumer behavior: Energy, waste, and water," Socio-Economic Planning Sciences, Elsevier, vol. 82(PA).
    17. Miriam Berretta & Joshua Furgeson & Yue (Nicole) Wu & Collins Zamawe & Ian Hamilton & John Eyers, 2021. "Residential energy efficiency interventions: A meta‐analysis of effectiveness studies," Campbell Systematic Reviews, John Wiley & Sons, vol. 17(4), December.
    18. Galina Besstremyannaya & Sergei Golovan, 2019. "Reconsideration of a simple approach to quantile regression for panel data: a comment on the Canay (2011) fixed effects estimator," Working Papers w0249, New Economic School (NES).

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