Split Incentives: A Preliminary Investigation Into Case Of Türkiye

Official URL: https://risc01.sabanciuniv.edu/record=b3422593

The split incentive problem represents a significant barrier to energy efficiency in the residential sector, particularly affecting the dynamics between property owners and tenants. This study investigates the presence of split incentives in the Turkish residential market, exploring how the misalignment between property owners and tenants contributes to divergent energy demand patterns. By employing household-level data from the Turkish Statistical Office’s Household Expenditure Surveys (2002-2019), we analyze energy expenditures and consumption across different tenure statuses. The findings document preliminary evidence of split incentives in the Turkish rental market, with tenants generally exhibiting higher monthly energy expenditures compared to homeowners. Notable energy efficiency gaps are observed between tenants and homeowners when considering differing house types and family sizes. The results highlight the need for targeted policy measures to align incentives between homeowners and tenants, with the ultimate goal of reducing energy inefficiencies in the residential sector.