IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-00799725.html
   My bibliography  Save this paper

Double moral hazard and the energy efficiency gap

Author

Listed:
  • Louis-Gaëtan Giraudet

    (CIRED - centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)

  • S. Houde

    (Department of Management Science and Engineering [Stanford] - Stanford University)

Abstract

Moral hazard issues can deter profitable investments in energy efficiency. Energy-savings insurance and quality standards can mitigate the problem - yet not eliminate it.

Suggested Citation

  • Louis-Gaëtan Giraudet & S. Houde, 2013. "Double moral hazard and the energy efficiency gap," Post-Print hal-00799725, HAL.
  • Handle: RePEc:hal:journl:hal-00799725
    Note: View the original document on HAL open archive server: https://enpc.hal.science/hal-00799725
    as

    Download full text from publisher

    File URL: https://enpc.hal.science/hal-00799725/document
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Kenneth Gillingham & Karen Palmer, 2014. "Bridging the Energy Efficiency Gap: Policy Insights from Economic Theory and Empirical Evidence," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 8(1), pages 18-38, January.
    2. Kenneth Gillingham & Richard G. Newell & Karen Palmer, 2009. "Energy Efficiency Economics and Policy," Annual Review of Resource Economics, Annual Reviews, vol. 1(1), pages 597-620, September.
    3. Gilbert E. Metcalf & Kevin A. Hassett, 1999. "Measuring The Energy Savings From Home Improvement Investments: Evidence From Monthly Billing Data," The Review of Economics and Statistics, MIT Press, vol. 81(3), pages 516-528, August.
    4. Russell Cooper & Thomas W. Ross, 1985. "Product Warranties and Double Moral Hazard," RAND Journal of Economics, The RAND Corporation, vol. 16(1), pages 103-113, Spring.
    5. Lucas W. Davis & Erich Muehlegger, 2010. "Do Americans consume too little natural gas? An empirical test of marginal cost pricing," RAND Journal of Economics, RAND Corporation, vol. 41(4), pages 791-810, December.
    6. Allcott, Hunt & Mullainathan, Sendhil & Taubinsky, Dmitry, 2014. "Energy policy with externalities and internalities," Journal of Public Economics, Elsevier, vol. 112(C), pages 72-88.
    7. Kenneth Gillingham & Matthew J. Kotchen & David S. Rapson & Gernot Wagner, 2013. "The rebound effect is overplayed," Nature, Nature, vol. 493(7433), pages 475-476, January.
    8. Louis-Gaëtan Giraudet & Philippe Quirion, 2008. "Efficiency and distributional impacts of tradable white certificates compared to taxes, subsidies and regulations," Revue d'économie politique, Dalloz, vol. 118(6), pages 885-914.
    9. Hunt Allcott & Michael Greenstone, 2012. "Is There an Energy Efficiency Gap?," Journal of Economic Perspectives, American Economic Association, vol. 26(1), pages 3-28, Winter.
    10. Severin Borenstein, 2014. "A Microeconomic Framework for Evaluating Energy Efficiency Rebound and Some Implications," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
    11. Koichiro Ito, 2015. "Asymmetric Incentives in Subsidies: Evidence from a Large-Scale Electricity Rebate Program," American Economic Journal: Economic Policy, American Economic Association, vol. 7(3), pages 209-237, August.
    12. Katrina Jessoe & David Rapson, 2014. "Knowledge Is (Less) Power: Experimental Evidence from Residential Energy Use," American Economic Review, American Economic Association, vol. 104(4), pages 1417-1438, April.
    13. Manuel Frondel & Colin Vance, 2013. "Heterogeneity in the Effect of Home Energy Audits: Theory and Evidence," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 55(3), pages 407-418, July.
    14. Hirst, Eric & White, Dennis & Goeltz, Richard, 1985. "Indoor temperature changes in retrofit homes," Energy, Elsevier, vol. 10(7), pages 861-870.
    15. 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.
    16. Darby, Michael R & Karni, Edi, 1973. "Free Competition and the Optimal Amount of Fraud," Journal of Law and Economics, University of Chicago Press, vol. 16(1), pages 67-88, April.
    17. Jerry A. Hausman, 1979. "Individual Discount Rates and the Purchase and Utilization of Energy-Using Durables," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 33-54, Spring.
    18. 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).
    19. Grant D. Jacobsen & Matthew J. Kotchen, 2013. "Are Building Codes Effective at Saving Energy? Evidence from Residential Billing Data in Florida," The Review of Economics and Statistics, MIT Press, vol. 95(1), pages 34-49, March.
    20. Train, Kenneth, 1985. "Discount rates in consumers' energy-related decisions: A review of the literature," Energy, Elsevier, vol. 10(12), pages 1243-1253.
    21. Burfurd, Ingrid & Gangadharan, Lata & Nemes, Veronika, 2012. "Stars and standards: Energy efficiency in rental markets," Journal of Environmental Economics and Management, Elsevier, vol. 64(2), pages 153-168.
    22. Mills, Evan, 2003. "Risk transfer via energy-savings insurance," Energy Policy, Elsevier, vol. 31(3), pages 273-281, February.
    23. Hunt Allcott, 2014. "Paternalism and Energy Efficiency: An Overview," NBER Working Papers 20363, National Bureau of Economic Research, Inc.
    24. Anin Aroonruengsawat, Maximilian Auffhammer, and Alan H. Sanstad, 2012. "The Impact of State Level Building Codes on Residential Electricity Consumption," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
    25. Sorrell, Steve & Dimitropoulos, John & Sommerville, Matt, 2009. "Empirical estimates of the direct rebound effect: A review," Energy Policy, Elsevier, vol. 37(4), pages 1356-1371, April.
    26. Howarth, Richard B. & Andersson, Bo, 1993. "Market barriers to energy efficiency," Energy Economics, Elsevier, vol. 15(4), pages 262-272, October.
    27. Jaffe, Adam B. & Stavins, Robert N., 1994. "The energy-efficiency gap What does it mean?," Energy Policy, Elsevier, vol. 22(10), pages 804-810, October.
    28. Brounen, Dirk & Kok, Nils, 2011. "On the economics of energy labels in the housing market," Journal of Environmental Economics and Management, Elsevier, vol. 62(2), pages 166-179, September.
    29. Boomhower, Judson & Davis, Lucas W., 2014. "A credible approach for measuring inframarginal participation in energy efficiency programs," Journal of Public Economics, Elsevier, vol. 113(C), pages 67-79.
    30. Sébastien Houde, 2014. "How Consumers Respond to Environmental Certification and the Value of Energy Information," NBER Working Papers 20019, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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.
    2. Nauleau, Marie-Laure & Giraudet, Louis-Gaëtan & Quirion, Philippe, 2015. "Energy Efficiency Policy with Price-quality Discrimination," Climate Change and Sustainable Development 202240, Fondazione Eni Enrico Mattei (FEEM).
    3. Nauleau, Marie-Laure & Giraudet, Louis-Gaëtan & Quirion, Philippe, 2015. "Energy efficiency subsidies with price-quality discrimination," Energy Economics, Elsevier, vol. 52(S1), pages 53-62.
    4. Todd D. Gerarden & Richard G. Newell & Robert N. Stavins & Robert C. Stowe, 2015. "An Assessment of the Energy-Efficiency Gap and Its Implications for Climate Change Policy," Working Papers 2015.28, Fondazione Eni Enrico Mattei.
    5. Dissemin, uploaded via & Nauleau, Marie-Laure & Giraudet, Louis-Gaëtan & Quirion, Philippe, 2018. "Energy efficiency subsidies with price-quality discrimination," OSF Preprints 5emgn, Center for Open Science.
    6. Louis-Gaetan Giraudet and Dominique Finon, 2015. "European experiences with white certifirecate obligations: A critical review of existing evaluations," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 1).
    7. Louis-Gaëtan Giraudet & D. Finon, 2014. "European experiences with white certificate obligations: A critical review of existing evaluations," Working Papers hal-01016110, HAL.
    8. Koirala, Bishwa S. & Bohara, Alok K. & Berrens, Robert P., 2014. "Estimating the net implicit price of energy efficient building codes on U.S. households," Energy Policy, Elsevier, vol. 73(C), pages 667-675.

    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. Louis-Gaëtan Giraudet & Sébastien Houde, 2015. "Double Moral Hazard and the Energy Efficiency Gap," Working Papers hal-01260907, HAL.
    2. Louis-Gaëtan Giraudet & Sébastien Houde, 2014. "Double moral hazard and the energy efficiency gap," Working Papers hal-01016109, HAL.
    3. Giraudet, Louis-Gaëtan, 2020. "Energy efficiency as a credence good: A review of informational barriers to energy savings in the building sector," Energy Economics, Elsevier, vol. 87(C).
    4. Louis-Gaëtan Giraudet, 2018. "Energy efficiency as a credence good: A review of informational barriers to building energy savings," Working Papers 2018.07, FAERE - French Association of Environmental and Resource Economists.
    5. Louis-Gaëtan Giraudet & Sébastien Houde & Joseph Maher, 2018. "Moral Hazard and the Energy Efficiency Gap: Theory and Evidence," Working Papers hal-01420872, HAL.
    6. 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.
    7. Ramos, A. & Gago, A. & Labandeira, X. & Linares, P., 2015. "The role of information for energy efficiency in the residential sector," Energy Economics, Elsevier, vol. 52(S1), pages 17-29.
    8. 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.
    9. Fischbacher, Urs & Schudy, Simeon & Teyssier, Sabrina, 2021. "Heterogeneous preferences and investments in energy saving measures," Resource and Energy Economics, Elsevier, vol. 63(C).
    10. Aydin, Erdal, 2016. "Energy conservation in the residential sector : The role of policy and market forces," Other publications TiSEM b9cedba8-1310-4097-90fb-b, Tilburg University, School of Economics and Management.
    11. Gerarden, Todd D. & Newell, Richard G. & Stavins, Robert N. & Stowe, Robert C., 2015. "An Assessment of the Energy-Efficiency Gap and Its Implications for Climate Change Policy," Climate Change and Sustainable Development 202116, Fondazione Eni Enrico Mattei (FEEM).
    12. Cattaneo, Cristina, 2018. "Internal and External Barriers to Energy Efficiency: Made-to-Measure Policy Interventions," CSI: Climate and Sustainable Innovation 269536, Fondazione Eni Enrico Mattei (FEEM).
    13. Kenneth Gillingham & Karen Palmer, 2014. "Bridging the Energy Efficiency Gap: Policy Insights from Economic Theory and Empirical Evidence," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 8(1), pages 18-38, January.
    14. Giraudet, Louis-Gaëtan & Guivarch, Céline & Quirion, Philippe, 2012. "Exploring the potential for energy conservation in French households through hybrid modeling," Energy Economics, Elsevier, vol. 34(2), pages 426-445.
    15. Louis-Gaëtan Giraudet & Antoine Missemer, 2023. "The History of Energy Efficiency in Economics: Breakpoints and Regularities," Post-Print halshs-02301636, HAL.
    16. Cattaneo, Cristina, 2018. "Internal and External Barriers to Energy Efficiency: Made-to-Measure Policy Interventions," CSI: Climate and Sustainable Innovation 269536, Fondazione Eni Enrico Mattei (FEEM).
    17. Schleich, Joachim & Gassmann, Xavier & Faure, Corinne & Meissner, Thomas, 2016. "Making the implicit explicit: A look inside the implicit discount rate," Energy Policy, Elsevier, vol. 97(C), pages 321-331.
    18. Li, Jia & Just, Richard E., 2018. "Modeling household energy consumption and adoption of energy efficient technology," Energy Economics, Elsevier, vol. 72(C), pages 404-415.
    19. Suter, Jordan F. & Shammin, Md Rumi, 2013. "Returns to residential energy efficiency and conservation measures: A field experiment," Energy Policy, Elsevier, vol. 59(C), pages 551-561.
    20. Lang, Ghislaine & Lanz, Bruno, 2022. "Climate policy without a price signal: Evidence on the implicit carbon price of energy efficiency in buildings," Journal of Environmental Economics and Management, Elsevier, vol. 111(C).

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:hal:journl:hal-00799725. 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: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    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.