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Evidence of a Homeowner-Renter Gap for Electric Appliances

Abstract:
This paper provides the first empirical analysis of the homeowner-renter gap for electric appliances. Using U.S. nationally representative data, the analysis shows that renters are significantly more likely than homeowners to have electric heat, electric hot water heating, an electric stove, and an electric dryer. The gap is highly statistically significant, prevalent across regions, and holds after controlling for the type, size, and age of the home, as well as for climate and household characteristics. The paper argues that this gap arises from the same split incentives that lead to the "landlord-tenant problem" and discusses the implications of the gap for an emerging set of policies aimed at reducing carbon dioxide emissions through building electrification.

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Keywords: Electrification mandates, Natural gas bans, Electric-preferred building codes, Landlord-tenant problem, Principal-agent problem, Split incentives

DOI: 10.5547/01956574.44.4.ldav

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Published in Volume 44, Number 4 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.

 

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