TY - JOUR
T1 - Asymmetric information in residential rental markets
T2 - Implications for the energy efficiency gap
AU - Myers, Erica
N1 - Funding Information:
I am grateful to Severin Borenstein, Maximilian Auffhammer, Meredith Fowlie, and Catherine Wolfram for their invaluable advice, and to Michael Anderson, Patrick Baylis, Joshua Blonz, Judson Boomhower, Benjamin Crost, Lucas Davis, Tatyana Deryugina, Walter Graf, Kelsey Jack, Shaun McRae, Karen Notsund, Louis Preonas, Sofia Berto Villas-Boas, Reed Walker, and Matthew Zaragoza-Watkins and seminar participants at Camp Resources and UC Berkeley for many helpful comments. Financial support from the Joseph L. Fisher Doctoral Dissertation Fellowship by Resources for the Future and from the Fisher Center for Real Estate & Urban Economics PhD Fellowship is gratefully acknowledged. This work was also supported by the USDA National Institute of Food and Agriculture Hatch Project # ILLU-470-343-1005308 . Replication code and data for this article can be found at https://github.com/ecmyersuiuc/Asymmetric-Information .
Funding Information:
I am grateful to Severin Borenstein, Maximilian Auffhammer, Meredith Fowlie, and Catherine Wolfram for their invaluable advice, and to Michael Anderson, Patrick Baylis, Joshua Blonz, Judson Boomhower, Benjamin Crost, Lucas Davis, Tatyana Deryugina, Walter Graf, Kelsey Jack, Shaun McRae, Karen Notsund, Louis Preonas, Sofia Berto Villas-Boas, Reed Walker, and Matthew Zaragoza-Watkins and seminar participants at Camp Resources and UC Berkeley for many helpful comments. Financial support from the Joseph L. Fisher Doctoral Dissertation Fellowship by Resources for the Future and from the Fisher Center for Real Estate & Urban Economics PhD Fellowship is gratefully acknowledged. This work was also supported by the USDA National Institute of Food and Agriculture Hatch Project # ILLU-470-343-1005308. Replication code and data for this article can be found at https://github.com/ecmyersuiuc/Asymmetric-Information.
Publisher Copyright:
© 2020 Elsevier B.V.
PY - 2020/10
Y1 - 2020/10
N2 - This paper explores whether energy cost information asymmetries exist between landlords and tenants by exploiting variation in which party pays for energy. Because tenants are always fully informed about their total housing costs in the landlord-pay regime, the effect of energy cost changes on tenant turnover, rents, and efficiency investment should differ between the two payment regimes under asymmetric information but not symmetric information. Using energy cost variation in the form of changes in relative heating fuel prices, I find evidence that tenants are uninformed about energy costs. This results in higher energy expenditures for tenants and implies that information campaigns or efficiency standards may improve market outcomes.
AB - This paper explores whether energy cost information asymmetries exist between landlords and tenants by exploiting variation in which party pays for energy. Because tenants are always fully informed about their total housing costs in the landlord-pay regime, the effect of energy cost changes on tenant turnover, rents, and efficiency investment should differ between the two payment regimes under asymmetric information but not symmetric information. Using energy cost variation in the form of changes in relative heating fuel prices, I find evidence that tenants are uninformed about energy costs. This results in higher energy expenditures for tenants and implies that information campaigns or efficiency standards may improve market outcomes.
KW - Asymmetric information
KW - Efficiency gap
KW - Landlord-tenant problem
UR - http://www.scopus.com/inward/record.url?scp=85089583928&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=85089583928&partnerID=8YFLogxK
U2 - 10.1016/j.jpubeco.2020.104251
DO - 10.1016/j.jpubeco.2020.104251
M3 - Article
AN - SCOPUS:85089583928
SN - 0047-2727
VL - 190
JO - Journal of Public Economics
JF - Journal of Public Economics
M1 - 104251
ER -