IDEAS home Printed from https://ideas.repec.org/a/spr/envpol/v26y2024i4d10.1007_s10018-024-00399-z.html
   My bibliography  Save this article

Is the split incentive problem worse for college student renters: an analysis of landlord self-reported and hypothetical choices?

Author

Listed:
  • Monica Haynes

    (University of Minnesota Duluth)

  • Christopher R. McIntosh

    (University of Minnesota Duluth)

  • Tommy Olafson

    (University of Minnesota Duluth)

Abstract

In the residential housing sector, energy conservation issues may arise in the relationship between landlords and renters (a.k.a. tenants) due to principal-agent and information problems. An example is the split incentive, where one party makes the energy efficiency decisions while the other pays the energy bill. Herein, we investigate whether the landlord and renter split incentive problem may be more likely and more challenging for college student renters than those who are not college students. This may occur from landlords perceiving that college renters lack sufficient demand for energy efficient improvements. There is a lack of studies regarding the possibility that college renters may face greater exposure to the split incentive problem. We surveyed landlords to better understand their prior energy efficiency investment decisions and used a contingent valuation question to further investigate their choices for a hypothetical return on investment scenario. The landlords had various mixes of college students and non-students in their properties. Landlords renting one single-family property exclusively to college students had, on average, completed fewer major upgrades to their rental properties and were less likely to invest in a hypothetical insulation upgrade.

Suggested Citation

  • Monica Haynes & Christopher R. McIntosh & Tommy Olafson, 2024. "Is the split incentive problem worse for college student renters: an analysis of landlord self-reported and hypothetical choices?," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 26(4), pages 781-802, October.
    • Handle: RePEc:spr:envpol:v:26:y:2024:i:4:d:10.1007_s10018-024-00399-z
    DOI: 10.1007/s10018-024-00399-z
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10018-024-00399-z
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10018-024-00399-z?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Levinson, Arik & Niemann, Scott, 2004. "Energy use by apartment tenants when landlords pay for utilities," Resource and Energy Economics, Elsevier, vol. 26(1), pages 51-75, March.
    2. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    3. Kenneth Gillingham, Matthew Harding, and David Rapson, 2012. "Split Incentives in Residential Energy Consumption," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2).
    4. Richard Carson & Jordan Louviere, 2011. "A Common Nomenclature for Stated Preference Elicitation Approaches," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 49(4), pages 539-559, August.
    5. Spence, Michael & Zeckhauser, Richard, 1971. "Insurance, Information, and Individual Action," American Economic Review, American Economic Association, vol. 61(2), pages 380-387, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kenneth Gillingham, Matthew Harding, and David Rapson, 2012. "Split Incentives in Residential Energy Consumption," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2).
    2. Ángeles Longarela-Ares & Anxo Calvo-Silvosa & José-Benito Pérez-López, 2020. "The Influence of Economic Barriers and Drivers on Energy Efficiency Investments in Maritime Shipping, from the Perspective of the Principal-Agent Problem," Sustainability, MDPI, vol. 12(19), pages 1-42, September.
    3. Nie, Hongguang & Kemp, René & Xu, Jin-Hua & Vasseur, Véronique & Fan, Ying, 2020. "Split incentive effects on the adoption of technical and behavioral energy-saving measures in the household sector in Western Europe," Energy Policy, Elsevier, vol. 140(C).
    4. Todd D. Gerarden & Richard G. Newell & Robert N. Stavins, 2017. "Assessing the Energy-Efficiency Gap," Journal of Economic Literature, American Economic Association, vol. 55(4), pages 1486-1525, December.
    5. Fischbacher, Urs & Schudy, Simeon & Teyssier, Sabrina, 2021. "Heterogeneous preferences and investments in energy saving measures," Resource and Energy Economics, Elsevier, vol. 63(C).
    6. Hendrik Schmitz & Reinhard Madlener, 2020. "Heterogeneity in price responsiveness for residential space heating in Germany," Empirical Economics, Springer, vol. 59(5), pages 2255-2281, November.
    7. Jeffrey M. Lacker, 1991. "Why is there debt?," Economic Review, Federal Reserve Bank of Richmond, vol. 77(Jul), pages 3-19.
    8. Petrov, Ivan & Ryan, Lisa, 2021. "The landlord-tenant problem and energy efficiency in the residential rental market," Energy Policy, Elsevier, vol. 157(C).
    9. Roberto Carlos Klann & Ilse Maria Beuren, 2011. "Characteristics of companies that influence their voluntary disclosure of performance indicators," Brazilian Business Review, Fucape Business School, vol. 8(2), pages 92-113, April.
    10. Charlier, Dorothée, 2015. "Energy efficiency investments in the context of split incentives among French households," Energy Policy, Elsevier, vol. 87(C), pages 465-479.
    11. Myers, Erica, 2020. "Asymmetric information in residential rental markets: Implications for the energy efficiency gap," Journal of Public Economics, Elsevier, vol. 190(C).
    12. Nie, George Y., 2023. "Address Challenges Markowitz (1952) Faces: A New Measure of Asset Risk," SocArXiv tgvb2_v1, Center for Open Science.
    13. Jack, B. Kelsey & Jayachandran, Seema & Malagutti, Flavio & Rao, Sarojini, 2024. "Environmental externalities and free-riding in the household," Journal of Development Economics, Elsevier, vol. 170(C).
    14. Henry Tosi, 2008. "Quo Vadis? Suggestions for future corporate governance research," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 12(2), pages 153-169, May.
    15. Liu, Nan & Zhao, Yuan & Ge, Jiaqi, 2018. "Do renters skimp on energy efficiency during economic recessions? Evidence from Northeast Scotland," Energy, Elsevier, vol. 165(PA), pages 164-175.
    16. repec:eee:labchp:v:2:y:1986:i:c:p:789-848 is not listed on IDEAS
    17. Oseni, Musiliu O., 2015. "Assessing the consumers’ willingness to adopt a prepayment metering system in Nigeria," Energy Policy, Elsevier, vol. 86(C), pages 154-165.
    18. Kahn, Matthew E. & Walsh, Randall, 2015. "Cities and the Environment," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 405-465, Elsevier.
    19. Louis-Gaëtan Giraudet & S. Houde, 2013. "Double moral hazard and the energy efficiency gap," Post-Print hal-00799725, HAL.
    20. Sanford J. Grossman & Oliver D. Hart, 1982. "Corporate Financial Structure and Managerial Incentives," NBER Chapters, in: The Economics of Information and Uncertainty, pages 107-140, National Bureau of Economic Research, Inc.
    21. Louis-Gaëtan Giraudet & Sébastien Houde & Joseph Maher, 2018. "Moral Hazard and the Energy Efficiency Gap: Theory and Evidence," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 5(4), pages 755-790.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:envpol:v:26:y:2024:i:4:d:10.1007_s10018-024-00399-z. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.