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

• Published in: Energy economics Vol. 95; p. 105007
• Main Authors: Lang, Ghislaine, Lanz, Bruno
• Format: Journal Article
• Language: English
• Published: Kidlington Elsevier B.V 01.03.2021; Elsevier Science Ltd
• Subjects: Acceptability; Attentional bias; Carbon dioxide; Central heating; Disclosure; Efficiency; Energy conservation; Energy economics; Energy efficiency; Heating; Incentives; Information sharing; Informational interventions; Investments; Multiple price lists; Owners; Payments; Property; Rented properties; Rents; Split incentives; Survey experiments; Taxation; Tenants; Informational interventions; Multiple price lists; Split incentives; Energy efficiency; Survey experiments; Rented properties
• ISSN: 0140-9883; 1873-6181
• DOI: 10.1016/j.eneco.2020.105007

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. •70% of tenants are willing to accept a rent increase for higher energy efficiency.•Informing tenants about CHF 1 lower energy bills permits CHF 1.12 in rent increases.•Making savings salient allows CHF 1.62 increase, adding uncertainty dampens effect.•Information about pro-social benefits of investments has no effect on choices.•Average treatment effect reflects heterogeneous changes along WTP distribution.