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How Large is the Owner-Renter Divide in Energy Efficient Technology?: Evidence from an OECD Cross-section
Umeå University, Faculty of Social Sciences, Center for Environmental and Resource Economics (CERE). Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Economics.ORCID iD: 0000-0002-9494-6467
2015 (English)In: Energy Journal, ISSN 0195-6574, E-ISSN 1944-9089, Vol. 36, no 4, 85-104 p.Article in journal (Refereed) Published
Abstract [en]

When the agent making an investment decision is different from the one bearing the costs of the decision, the outcome (energy usage, here) is socially sub-optimal, a scenario known in the energy efficient technology case as "split incentive" effect. Using a sample of households (from a survey conducted in 2011) from 11 OECD countries, this paper investigates the magnitude of the "split incentive" effect between home occupants who are owners and those who are renters. A wide variety of energy-related "technologies" are considered: appliances, energy efficient bulbs, insulation, heat thermostat, solar panels, ground source heat pumps and wind turbines. Mean difference in patterns of access to these technologies are consistent with the "split incentives" hypothesis. Regression results suggest that, even after controlling for the sizeable differences in observed characteristics, owners are substantially more likely to have access to energy efficient appliances and to better insulation as well as to heat thermostats. For relatively immobile investments such as wind turbines and ground source heat pumps, we find no differences between owners and renters.

Place, publisher, year, edition, pages
2015. Vol. 36, no 4, 85-104 p.
Keyword [en]
Principal-Agent Problem, Split Incentives, Energy Efficiency
National Category
Economics Environmental Engineering
URN: urn:nbn:se:umu:diva-110555DOI: 10.5547/01956574.36.4.ckriISI: 000362151900005OAI: diva2:868425
Available from: 2015-11-10 Created: 2015-10-23 Last updated: 2015-11-10Bibliographically approved

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Krishnamurthy, Chandra Kiran B.
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