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Factors Affecting Renters' Electricity Use: More Than Split Incentives

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Abstract:
This paper uses data from the 2015 Residential Energy Consumption Survey to explore the extent to which renters' electricity use in the United States exceeds that of otherwise similar non-renters. Renting households are found to use approximately 9% more electricity than non-renters when controlling for location, socioeconomic, and many appliance-quantity controls. There are multiple factors that explain this extra electricity use, including inferior energy efficiency of appliances, behavioral factors, differences in bill payment responsibilities, and additional reliance by renters on electric space and water heaters. The paper finds that none of these factors are dominant. The phenomenon of renters' (conditionally) higher electricity use is thus best understood as one that emerges from multiple sources.

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Keywords: Split incentives, Rent, Electricity consumption, Efficiency, Household survey, United States

DOI: 10.5547/01956574.42.5.rbes

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Published in Volume 42, Number 5 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.

 

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