Energy efficiency as a credence good: A review of informational barriers to building energy savings
Louis-Ga‘tan Giraudet ()
Additional contact information
Louis-Ga‘tan Giraudet: Ecole des Ponts ParisTech, CIRED
No 2018.04, Policy Papers from FAERE - French Association of Environmental and Resource Economists
Information problems have early been suspected to be the main barrier to energy-efficiency investment. I review the vast yet piecemeal research that has been carried out since. Focusing on energy efficiency in buildings, I organize the review around the concept of credence good: just like that of auto repairs or taxi rides, the quality of energy-efficiency measures is never fully revealed to the buyer; as a result, it is subject to multiple information asymmetries. My first contribution is to distinguish symmetric-information problems from information asymmetries. The former arise when information is either incomplete or imperfect, but equally shared by contracting parties; as non-market failures, these can be addressed by technological progress and insurance markets. My second contribution is to give structure to the information asymmetries associated with energy efficiency by disentangling screening, signalling, moral hazard and price discrimination within a variety of contractual relationships involving buyers and sellers, owners and renters, and borrowers and lenders. I find evidence of information asymmetries to be compelling in landlord-tenant relationships, unclear in real estate markets, and scarce in retrofit contracting and financing. I conclude by discussing the intricacies between informational and behavioural problems in energy-efficiency decisions.
Keywords: Energy-efficiency gap; Information asymmetries; Credence goods; Building energy (search for similar items in EconPapers)
JEL-codes: Q41 D82 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed
Downloads: (external link)
http://faere.fr/pub/PolicyPapers/Giraudet_FAERE_PP2018.04.pdf First version, 2018 (application/pdf)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:fae:ppaper:2018.04
Access Statistics for this paper
More papers in Policy Papers from FAERE - French Association of Environmental and Resource Economists Contact information at EDIRC.
Bibliographic data for series maintained by Mireille Chiroleu-Assouline ().