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Do renters skimp on energy efficiency during economic recessions? Evidence from Northeast Scotland

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  • Liu, Nan
  • Zhao, Yuan
  • Ge, Jiaqi

Abstract

This paper investigates tenants' willingness to pay (WTP) for energy efficiency in the private rented housing sector. Using data from Aberdeen city and Shire in Scotland between the third quarter of 2013 and the second quarter of 2017, rent premiums of 2–11% associated with more energy efficient dwellings are found, and the magnitudes of these premiums are considerable compared to those of other physical attributes. Such premiums however, are significantly reduced during economic recession, suggesting that tenants' WTP for energy efficiency varies under different economic conditions. From a methodological perspective, the study uses a multilevel model, where the unobservable neighbourhood and age effects are approximated. Our results implicate that although tenants’ WTP for more energy efficient is present, there still might be a need for public strategy to facilitate the improvement of energy performance in the private rented sector.

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  • Liu, Nan & Zhao, Yuan & Ge, Jiaqi, 2018. "Do renters skimp on energy efficiency during economic recessions? Evidence from Northeast Scotland," Energy, Elsevier, vol. 165(PA), pages 164-175.
    • Handle: RePEc:eee:energy:v:165:y:2018:i:pa:p:164-175
    DOI: 10.1016/j.energy.2018.09.078
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    2. Hyunjoo Lee & Misuk Lee & Sesil Lim, 2018. "Do Consumers Care about the Energy Efficiency of Buildings? Understanding Residential Choice Based on Energy Performance Certificates," Sustainability, MDPI, vol. 10(11), pages 1-18, November.
    3. Dalia Streimikiene & Tomas Balezentis & Ilona Alisauskaite-Seskiene & Gintare Stankuniene & Zaneta Simanaviciene, 2019. "A Review of Willingness to Pay Studies for Climate Change Mitigation in the Energy Sector," Energies, MDPI, vol. 12(8), pages 1-38, April.
    4. Ou, Yunbei & Bailey, Nick & McArthur, David Philip & Zhao, Qunshan, 2024. "The Price Premium of Residential Energy Performance Certificates: A Scoping Review of the European Literature," OSF Preprints bm9xk, Center for Open Science.
    5. Nan Liu, 2021. "Market buoyancy, information transparency and pricing strategy in the Scottish housing market," Urban Studies, Urban Studies Journal Limited, vol. 58(16), pages 3388-3406, December.

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