Energy efficiency, information, and theacceptability of rent increases: A multipleprice list experiment with tenants

This paper studies split incentives associated with energy efficiency investments in rentedproperties. We design a multiple price list experiment representing owners’ decisions to re-place the central heating appliance, and elicit tenants’ willingness to pay (WTP) for an optionthat is 30% more energy efficient. We then quantify how tenants’ WTP varies with a set ofinformational interventions. Our results show that tenants’ baseline WTP is around CHF 450per year on average (about USD 470), and that information on expected financial savingsincreases mean WTP by up to 70%. A set of quantile regressions further suggest that infor-mation on financial gains induces around 30% of tenants to adjust baseline WTP accordingly,while 20% oppose rent increases and do not respond to information and tenants in the uppertail of the distribution increase their WTP substantially. By contrast, informing tenants aboutCO2tax payments has no incremental impact on WTP.