Template-Type: ReDIF-Paper 1.0
Title: The Tragedy of the Common Heating Bill
Author-Name: Harald Mayr
Author-Email: harald.mayr@econ.uzh.ch
Author-Name: Mateus Souza
Author-Email: mateus.souza@uni-mannheim.de

Classification-JEL: D61, Q41, Q52
Keywords: Free-riding, submetering, individual billing, heating energy, tragedy of
the commons, welfare

Abstract: Without heat metering, households face strong free-riding incentives. Using data from Swiss
households, we find that the staggered introduction of submetering reduced heating expenses
by 17%, on average. Machine learning techniques reveal highly heterogeneous effects, consistent
with coordination failure in larger buildings and strategic exit of free-riders. We find that
households are price elastic even when they share a common heating bill. Our results suggest
that most households do not exploit the free-riding incentive, especially in smaller buildings.
“Schmeduling,” inattention to the billing regime, and pro-social behavior can explain the low
prevalence of free-riding. Nevertheless, submetering is welfare-improving for most buildings.

Note: 
Length: 69
Creation-Date: 2025-01
Revision-Date: 
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp629
File-Format: application/pdf
Handle: RePEc:bon:boncrc:CRCTR224_2025_629