Free Riding
نویسندگان
چکیده
We use a unique dataset that combines the responses from an original survey of households, information about the structural characteristics of their homes, utility-provided longitudinal electricity usage records, plus utility program participation information, to study the uptake of energy efficiency incentives and their effect on residential electricity consumption. Attention is restricted to homes where heating and cooling are provided exclusively by heat pumps, which are common in our study area—four counties in Maryland—and were covered by federal, state and utility incentives during our study period (2007-2012). We deploy a differencein-difference study design. We find that replacing an existing heat pump with a new one does reduce electricity usage: the average treatment effect is an 8% reduction. However, the effect differs dramatically across households based upon whether they receive an incentive towards the purchase of a new heat pump. Among those that receive the purchase incentive, the effect is small or nil, and indeed, the larger the incentive, the smaller the reduction in electricity usage. Those that do not receive incentives reduce usage by about 16%. Our results appear to be driven by the numerous free riders in our sample and by persons who—inferred from their responses to survey questions—might be exploiting the subsidy to purchase a larger system and increase usage, with no emissions reductions benefits to society. JEL Classification: Q41, D12, H3
منابع مشابه
Coordination of Information Sharing and Cooperative Advertising in a Decentralized Supply Chain with Competing Retailers Considering Free Riding Behavior
This paper studies a decentralized supply chain in which a manufacturer sells a common generic product through two traditional and online retailers under free riding market. We assume that the traditional retailer provides the value added services but the online retailer does not. Factors such as retail prices, local advertising of the retailers, global advertising of the manufacturer and servi...
متن کاملWHY FREE RIDE? Strategies and Learning in Public Goods Experiments
The free riding hypothesis has been the subject of laboratory experiments for more than a decade. While the extent of free riding has often varied across experiments, three observations are consistently replicated. First, there is no significant evidence of free riding in single-shot games. Marwell and Ames (1981) for instance, found that subjects generally provide the public good at levels hal...
متن کاملHow Does Free Riding on Customer Service Affect Competition?
T free-riding problem occurs if the presales activities needed to sell a product can be conducted separately from the actual sale of the product. Intuitively, free riding should hurt the retailer that provides that service, but the author shows analytically that free riding benefits not only the free-riding retailer, but also the retailer that provides the service when customers are heterogeneo...
متن کاملThe challenge for multichannel services: Cross-channel free-riding behavior
In multichannel environments, consumers can move easily among different channels. They engage in cross-channel free-riding when they use one retailer’s channel to obtain information or evaluate products and then switch to another retailer’s channel to complete the purchase. Cross-channel free-riding erodes profits and is one of the most important issues that firms face in the multichannel era. ...
متن کاملConsumer Alienation and Attitudes toward Consumer Free Riding
Given that consumer free riding involves a relatively high level of interaction with the marketplace, it is likely that individuals’ attitudes toward consumer free riding are related to degree to which they feel alienated from the marketplace. Such a relationship was observed to exist. Through further examination, attitudes toward consumer free riding appear to originate from two of the three a...
متن کامل