[31.03.2023] Thematic Seminar #1 – Examples from quantifying the split-incentive problem in the private rented sector in the national level 

Was organised by ENPOR on the Friday 31st of March, 11-12am CET

A visual briefing was developed gathering the event takeaways, you can access it here!

RECORDING

In most EU countries, we do not have any studies or estimations on the extent of the split incentive problem, which leads to design of policies for renovation with a subsidy rate that is not often adequate or optimised as it cannot capture the impact of the split incentive. The purpose of this seminar is to show various methods of how we can we quantify the split incentive problem in a country, through surveys and methodologies that are unbiased and can generate useful findings for further policy design. It is especially useful for energy agencies as they can get inspiration or ready- templates with the questions that need to be asked and means of sampling tenants and owners, as well as ways to extract results from these surveys. The better understanding of the split incentive problem can assist policymakers in quantifying the financing requirements for promoting energy efficiency investments in the built environment among the landlords and tenants. Through such knowledge, policymakers can design their policies for energy efficiency upgrades and target more efficiently the private rented sector.

The split-incentive in building retrofit measures is “linked with cost recovery issues related to energy efficiency upgrade investments due to the failure of distributing effectively financial obligations and rewards of these investments between concerned actors” (JRC 2017) and is a key problem in tackling energy poverty in the private rented sector.  

Speakers 

• Christos Tourkolias (CRES) “Examining the split incentive problem in Greece” 

The presentation will present and analyse results of a study conducted in Greece to assess the phenomenon of split incentives. Emphasis will be given on the conducted survey with the participation of both landlords and tenants highlighting their contradicting perceptions. Information will be provided about the design of the questionnaire, the sampling and the main problems. Finally, the main policy recommendations will be described also for addressing the problem of split incentives. 

• Anamari Majdandžić (DOOR) “Split incentive in Croatia – free-based tenancy” 

Following EPOV indicator, a questionnaire was developed as a tool to collect data, identify the key aspects of energy poverty and propose the criteria for its identification and indicators for its monitoring. The presentation will analyse results from four municipalities in Croatia on energy poverty, focusing on the situation in the private rented sector and on the split incentive. An unregulated market and unresolved property-legal relations contribute to the problem of lack of national data and the market operating in the shadow zone. Due to unresolved property-legal relations there is so-called free – based tenancy, which always includes two separate families/households in the same dwelling and extended families living in a joint household. 

• Hongguang Nie (Changchun University of Science and Technology) “Split incentive effects on the adoption of technical and behavioral energy-saving measures in the household sector in Western Europe” 

Significant differences in the adoption of energy-saving measures between homeowners and renters were found in the survey data of 1,248 households from the Netherlands, Germany, and Belgium. In this study, we examined the influence of split incentive effects between homeowners and renters, which stem from differences between those who pay and those who enjoy the benefits of the adoption of energy-efficient (EE) technology and energy-saving behaviors. 

• Dr. Lucie Maruejols (Post-Doctoral Researcher, Department of Agricultural Economics and Rural  Development, University of Göttingen, Germany) “Split incentives and energy efficiency in Canadian multi-family dwellings”.

The study examines the energy-related behaviour of owners and occupants of multi-family dwellings in Canada, some of whom do not pay directly for electricity or heat, but instead have these costs included in their rent or condo fees. Using data from a  Survey of Household Energy Use, we look at the extent to which split incentives that result from bill-paying arrangements affect a variety of activities including the setting of temperatures at various times of the day and the use of eco-friendly options in basic household tasks. The empirical results suggest the possibility of environmental benefits from policies targeted at reducing the impacts of the behaviour of those who do not pay directly for energy use.