ADOPTION OF ENERGY-EFFICIENT AIR CONDITIONERS AND THE PRINCIPAL-AGENT PROBLEM: EVIDENCE FROM CHINA

Xiao-Bing Zhang, Chang Su, Wenji Zhou and Ping Qin
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Xiao-Bing Zhang: ��Department of Technology, Management and Economics, Technical University of Denmark, Copenhagen 2800, Denmark
Chang Su: ��School of Economics and Management, Beijing Jiaotong University, Beijing 100044, P. R. China
Wenji Zhou: School of Applied Economics, Renmin University of China, Beijing 100872, P. R. China
Ping Qin: School of Applied Economics, Renmin University of China, Beijing 100872, P. R. China

Climate Change Economics (CCE), 2024, vol. 15, issue 02, 1-20

Abstract: As an important measure for households’ adaptation to climate change, air conditioning is becoming more and more prevailing in developing countries, which implies a larger demand for electricity and highlights the role of energy-efficient air conditioners (ACs) in energy saving. Using household-level data from China, this paper investigates the determinants of households’ adoption of energy-efficient ACs, with a focus on the role of the split-incentive (principal-agent) problem between homeowners and renters in the adoption of energy-efficient ACs. The results show that the principal-agent (PA) problem does exist in the adoption of energy-efficient ACs in Chinese households, with renter-occupied dwellings being about 10.2% more likely to have low energy-efficient ACs installed in dwellings, compared to homeowner-occupied dwellings. Moreover, the increased energy consumption and carbon emissions due to the PA problem in AC investment are calculated based on the estimated agency effect.

Keywords: Household energy consumption; energy-efficient ACs; principal-agent problem; ordered probit model (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1142/S2010007823500252

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