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Waikato warm home study

Author

Listed:
  • Phillips, Yvonne
  • Scarpa, Riccardo

Abstract

New Zealand houses are cold, damp, and poorly insulated by international standards. Our substandard housing stock has negative effects on health, quality of life, productivity, winter air quality, energy use and transmission. Investment in home energy efficiency is below the socially optimal level due to information asymmetries, bounded rationality and to some degree, non-excludability. Uptake of government grants for insulation has been very low in some communities, especially by owners of private rental properties. This study examines consumer preferences and perceptions of home energy efficiency technologies for residents of the Waikato region. We use a choice experiment approach to determine willingness to pay by owner-occupiers, landlords and tenants. Owner-occupiers are willing to pay significantly more than landlords for all features except for double-glazing. Tenants score their homes lower in terms of warmth and comfort than the landlord, and are willing to pay higher rent for improved insulation. However, the majority of tenants don’t know what insulation their home already has. Solving this information asymmetry problem with home energy ratings may be a more efficient way to increase investment than larger subsidies for landlords.

Suggested Citation

  • Phillips, Yvonne & Scarpa, Riccardo, 2010. "Waikato warm home study," 2010 Conference, August 26-27, 2010, Nelson, New Zealand 96494, New Zealand Agricultural and Resource Economics Society.
    • Handle: RePEc:ags:nzar10:96494
    DOI: 10.22004/ag.econ.96494
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    References listed on IDEAS

    as
    1. Danny Campbell & W George Hutchinson & Riccardo Scarpa, 2009. "Using Choice Experiments to Explore the Spatial Distribution of Willingness to Pay for Rural Landscape Improvements," Environment and Planning A, , vol. 41(1), pages 97-111, January.
    2. Fosgerau, Mogens & Bierlaire, Michel, 2007. "A practical test for the choice of mixing distribution in discrete choice models," Transportation Research Part B: Methodological, Elsevier, vol. 41(7), pages 784-794, August.
    3. Ferrini, Silvia & Scarpa, Riccardo, 2007. "Designs with a priori information for nonmarket valuation with choice experiments: A Monte Carlo study," Journal of Environmental Economics and Management, Elsevier, vol. 53(3), pages 342-363, May.
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    Cited by:

    1. Arthur Grimes, Nicholas Preval, Chris Young, Richard Arnold, Tim Denne, Philippa Howden-Chapman, and Lucy Telfar-Barnard, 2016. "Does Retrofitted Insulation Reduce Household Energy Use? Theory and Practice," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4).
    2. Arthur, Grimes & Tim, Denne & Philippa, Howden-Chapman & Richard, Arnold & Lucy, Telfar-Barnard & Nicholas, Preval & Chris, Young, 2012. "Cost benefit analysis of the Warm Up New Zealand: Heat Smart programme," MPRA Paper 99919, University Library of Munich, Germany.

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