Why Renters Waste More Energy Than Homeowners

Renting an apartment can seem like a compact, environmentally efficient way of living, but when it comes to energy use, that's not always the case. University of California, Berkeley economists Lucas Davis and David Levine recently found that renters are significantly less likely than homeowners to report having efficient Energy Star appliances (via the New York Times)*:

What's going on here? Davis and Levine think it's the so-called "landlord-tenant problem." Simply put, landlords have little incentive to buy energy-efficient (read: expensive) appliances for their rental units, because the renters themselves typically pay the utility bills. In theory, landlords could buy efficient appliances and pass on the cost as higher rent, but they might have a hard time telling potential tenants exactly how much they'll save on utilities.