5 minute read
Swaying Consumer Choices: Study finds
from CPM July 2022
by MediaEdge
CONVINCING EVIDENCE
ACCESS TO COMPARATIVE energy scores could sway prospective renters’ evaluation of available apartments. Newly released study findings from the American Council for an Energy-Efficient Economy (ACEEE) show a 21% increase in traffic to the most energy-efficient units when scores appear on all rental listings, whereas there is little discernible uptick in interest when information is displayed only for the bestperforming units with no comparative context.
Results of the controlled experiment, involving 2,455 participants considered to be roughly representative of the U.S. population, also indicate prospective renters were more willing to consider units with higher rents if they were attached to better energy scores. That trend was most noted among those younger than 45 and/or who lived in the country’s hottest or coldest climate zones. Meanwhile, there was no significant difference in prospective tenants’ preferences related to income or education levels.
“Our experiment showed that if renters have that [comparative] energy cost or efficiency rating, it’s absolutely going to affect their choices,” submits Reuven Sussman, lead author of the accompanying report and Director of the ACEEE’s behaviour and human dimensions program. “It may also nudge landlords to make their buildings more efficient.”
The study, known as a discrete choice experiment (DCE), used a mock website that generated listings in response to participants’ specifications about rent range and other amenities. These were presented in various formats, including: with no energy scores; with scores only for the best performing units, which is reflective of the general experience of voluntary energy-use reporting; and with minimal to greater context for interpreting scores and their meaning for energy costs.
In doing so, researchers aimed to glean evidence to help determine: • whether energy-efficient units get more attention when information about energy efficiency is available;
• which formats for imparting information increase prospective renters’ willingness to pay for energy efficiency; • which renter demographics place greater value on energy efficiency; and
• how renters’ responses compare to previous research findings about homebuyers.
As a qualifier to their findings, the researchers acknowledge the mock website’s limited number of choices versus the wider and more detailed selections apartment-seekers would typically find in real rental listings. However, they conclude energy scores are particularly effective when they are presented in tandem with the unit’s monthly energy costs, and along with a continuum of average energy costs for comparable units in the geographic region pegged to a range of energy scores.
In such cases, prospective renters were willing to entertain rents that were more than 2% higher for each increment of improved energy score. Even with fewer details, on average, prospective renters were willing to pay an extra 1.8% in rent per increment of improved energy score.
Based on a current average rent of USD $1,877, ACEEE researchers hypothesize landlords could realize a revenue gain of USD $405 per unit for each gradient of improved energy performance on a 10-point scale.
“This value could go up to as much as $520 with some labels,” they observe. “Furthermore, many cities have older buildings that could likely increase their scores by two or three points with existing retrofit technologies, thus earning $800 to $1,200 additional revenue per year.” zz
ALBERTA DELIVERS EXCLUSIVE RELIEF
Rental apartment and condominium dwellers with sub-metered suites aren’t eligible for Alberta’s six-month electricity rebate. Although the provincial Associate Minister of Natural Gas and Electricity maintains the rebate is meant to “help reduce the financial burden that many families in Alberta are dealing with due to the rising cost of living,” consumers must have a direct account with a utility to receive the promised $50 discount on their hydro bills from July to December 2022.
Multifamily landlords or condo corporations in sub-metered buildings will be eligible to receive the rebate for electricity consumption tied to the building’s common elements if total usage has been less than 250 megawatt-hours (MWh) over the previous 12 months. Since bulk metered multifamily buildings are likely to exceed the 250 MWh annual threshold for consumption, few landlords and condominium corporations will receive relief in that scenario. More information about the ACEEE study can be found at www.aceee.org/researchreport/b2204.
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