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Stranded houses? The price effect of a minimum energy efficiency standard

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  • Ferentinos, Konstantinos
  • Gibberd, Alex
  • Guin, Benjamin

Abstract

Climate policies aimed at reducing greenhouse gas emissions can lead to decreases in the values of assets, risking them to become “stranded”. We study the price effects of the introduction of a specific climate policy, a minimum energy efficiency standard, in the housing market. Leveraging a unique data set of the population of all residential house transactions in England and Wales, we show that prices of energy-inefficient properties affected by this policy decreased on average by about £5k to £9k relative to efficient ones. We interpret this evidence as being consistent with semi-strong market efficiency in the housing market.

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  • Ferentinos, Konstantinos & Gibberd, Alex & Guin, Benjamin, 2023. "Stranded houses? The price effect of a minimum energy efficiency standard," Energy Economics, Elsevier, vol. 120(C).
    • Handle: RePEc:eee:eneeco:v:120:y:2023:i:c:s0140988323000531
    DOI: 10.1016/j.eneco.2023.106555
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    More about this item

    Keywords

    Climate policy; House prices; Energy efficiency;
    All these keywords.

    JEL classification:

    • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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