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Energy efficiency, information, and the acceptability of rent increases: A survey experiment with tenants

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  • Ghislaine Lang
  • Bruno Lanz

Abstract

This paper studies the role of imperfect information and attentional biases in the context of energy efficiency investments in rented properties and associated split incentives. We design a multiple price list experiment representing owners' decision to replace the central heating appliance, and employ both within-subject information disclosure and between-subject variation in information provision to quantify how tenants trade off energy efficiency and rent increases. Results show that informing tenants of a CHF 1 decrease in energy bills leads to CHF 1.12 in acceptable rent increase on average. Quantile regressions further indicate that the average treatment effect of information reflects heterogeneous changes along the entire distribution of acceptable rent increases. By contrast, information on energy bills variability dampens acceptable rent increase, and information about CO2 tax payments has no incremental impact on choices. Our results highlight the importance of credible ex-ante estimates of financial savings associated with energy efficiency investments.

Suggested Citation

  • Ghislaine Lang & Bruno Lanz, 2018. "Energy efficiency, information, and the acceptability of rent increases: A survey experiment with tenants," IRENE Working Papers 18-04, IRENE Institute of Economic Research.
  • Handle: RePEc:irn:wpaper:18-04
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    Cited by:

    1. Rui Evangelista & João Andrade E Silva & Esmeralda A. Ramalho, 2021. "How heterogeneous is the impact of energy efficiency on dwelling prices? Evidence from the application of the unconditional quantile hedonic model to the Portuguese residential market," Working Papers REM 2021/0186, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    2. Lang, Ghislaine & Farsi, Mehdi & Lanz, Bruno & Weber, Sylvain, 2021. "Energy efficiency and heating technology investments: Manipulating financial information in a discrete choice experiment," Resource and Energy Economics, Elsevier, vol. 64(C).
    3. Dalia Streimikiene & Tomas Balezentis, 2020. "Willingness to Pay for Renovation of Multi-Flat Buildings and to Share the Costs of Renovation," Energies, MDPI, vol. 13(11), pages 1-16, May.
    4. Evangelista, Rui & Silva, João Andrade e & Ramalho, Esmeralda A., 2022. "How heterogeneous is the impact of energy efficiency on dwelling prices? Evidence from the application of the unconditional quantile hedonic model to the Portuguese residential market," Energy Economics, Elsevier, vol. 109(C).
    5. Jack, B. Kelsey & McDermott, Kathryn & Sautmann, Anja, 2022. "Multiple price lists for willingness to pay elicitation," Journal of Development Economics, Elsevier, vol. 159(C).
    6. Peñasco, Cristina & Anadón, Laura Díaz, 2023. "Assessing the effectiveness of energy efficiency measures in the residential sector gas consumption through dynamic treatment effects: Evidence from England and Wales," Energy Economics, Elsevier, vol. 117(C).
    7. Fanghella, Valeria & Guetlein, Marie-Charlotte & Schleich, Joachim & Sebi, Carine, 2023. "Preferences on financing mechanisms for thermal retrofit measures in multi-owner buildings: A discrete choice experiment with landlords and owner-occupiers in France," Resource and Energy Economics, Elsevier, vol. 74(C).
    8. Streicher, Kai Nino & Berger, Matthias & Panos, Evangelos & Narula, Kapil & Soini, Martin Christoph & Patel, Martin K., 2021. "Optimal building retrofit pathways considering stock dynamics and climate change impacts," Energy Policy, Elsevier, vol. 152(C).
    9. Sima, Catalina Alexandra & Roscia, Mariacristina & Dancu, Vasile Sebastian, 2022. "Social behavior analysis for improving the positive energy transition," Renewable Energy, Elsevier, vol. 196(C), pages 1325-1344.
    10. Zhang, Dongcheng & Jiang, Hanchen & Qiang, Maoshan, 2023. "Public attitudes toward hydropower in China: The role of information provision and partisan identification," Technological Forecasting and Social Change, Elsevier, vol. 195(C).

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    More about this item

    Keywords

    Split incentives; Informational interventions; Energy efficiency; Rented properties; Survey experiments; Multiple price lists.;
    All these keywords.

    JEL classification:

    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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