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The capitalization of energy labels into house prices. Evidence from Italy

Author

Listed:
  • Michele Loberto

    (Bank of Italy)

  • Alessandro Mistretta

    (Bank of Italy)

  • Matteo Spuri

    (Bank of Italy)

Abstract

Mitigating the negative impact of climate change implies a drastic reduction in greenhouse gas emissions: moving towards the net-zero target requires, among other things, a dramatic improvement in the energy efficiency of residential buildings, which account for 12.5 per cent of greenhouse gas emissions in Italy. This paper estimates the extent to which energy efficiency labels are capitalized into house prices. We find that the most energy-efficient houses sell at a 25 per cent premium over the least efficient ones. Our contribution is relevant for two reasons. First, we provide granular estimates of the impact of energy labels on house prices in Italy and show that the energy efficiency premium is significantly heterogeneous across provinces due to differences in climate conditions and regulatory frameworks. Second, energy labels play a key role and are used as a benchmark for several policies, and the heterogeneity in the energy efficiency premium may call for more targeted public policies that promote investment in energy efficiency.

Suggested Citation

  • Michele Loberto & Alessandro Mistretta & Matteo Spuri, 2023. "The capitalization of energy labels into house prices. Evidence from Italy," Questioni di Economia e Finanza (Occasional Papers) 818, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_818_23
    as

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    File URL: https://www.bancaditalia.it/pubblicazioni/qef/2023-0818/QEF_818_23.pdf
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    References listed on IDEAS

    as
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    5. Matteo Benetton & Simone Emiliozzi & Elisa Guglielminetti & Michele Loberto & Alessandro Mistretta, 2022. "Do house prices reflect climate change adaptation? Evidence from the city on the water," Questioni di Economia e Finanza (Occasional Papers) 735, Bank of Italy, Economic Research and International Relations Area.
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    More about this item

    Keywords

    housing; energy efficiency;

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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