Discriminatory subsidies for energy-efficient technologies and the role of envy

Valeria Fanghella, Corinne Faure, Marie-Charlotte Guetlein and Joachim Schleich

Resource and Energy Economics, 2022, vol. 68, issue C

Abstract: Discriminatory subsidies, that is, subsidies for which only a subset of the population is eligible, are widespread. However, research on social preferences suggests that non-eligible households may negatively respond to these subsidies. We investigate both eligible and non-eligible households’ response to discriminatory subsidies for smart thermostats using a discrete choice experiment with 3071 owner-occupiers from France and Romania. Households are randomly exposed to discriminatory subsidies through a between-subject design that manipulates two factors: type of discrimination (positive or negative) and eligibility criteria (based on geographical location or on household characteristics). A control condition (uniform subsidy) is also included. In addition, we elicit envy via an incentivized game in the sample from France. Our results show that eligible households are more likely to adopt a smart thermostat, regardless of whether the subsidy is uniform or discriminatory. By contrast, non-eligible households are less likely to adopt it, especially when eligibility criteria are based on household characteristics. We find no evidence for a moderating effect of envy.

Keywords: Discriminatory subsidy; Energy efficiency; Envy; Choice experiment (search for similar items in EconPapers)
JEL-codes: C83 C90 D03 Q01 Q48 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:resene:v:68:y:2022:i:c:s092876552200015x

DOI: 10.1016/j.reseneeco.2022.101298

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