Split incentive effects on the adoption of technical and behavioral energy-saving measures in the household sector in Western Europe

Abstract

Significant differences in the adoption of energy-saving measures between homeowners and renters were found in the survey data of 1,248 households from the Netherlands, Germany, and Belgium. In this study, we examined the influence of split incentive effects between homeowners and renters, which stem from differences between those who pay and those who enjoy the benefits of the adoption of energy-efficient (EE) technology and energy-saving behaviors. Average marginal effects were used to measure the magnitude of the “split incentive” effect by considering many EE technologies and energy-saving behaviors. Both split incentive effects were measured and compared for the first time, producing some interesting results. There is clear evidence of split incentive problems for both measures, and on average, homeowners were found to be16.08% more likely than renters to have access to adoptable EE technologies, while the effects were much smaller (only 4.28%) for adopting behavioral measures. The results were highly robust for household characteristics and specific psychological determinants, such as willingness-to-pay and environmental beliefs. Policy implications are provided to address the split incentive problems in rental markets in household sectors, based on our results.